Jim Haught, D.D.S., opened an incorporated dental practice on January 1, 2014. D

Question

Jim Haught, D.D.S., opened an incorporated dental practice on January 1, 2014. During the first month of operations, the following transactions occurred. Performed services for patients who had dental plan insurance. At January 31, $770 of such services was completed but not yet billed to the insurance companies. Utility expenses incurred but not paid prior to January 31 totaled $660. Purchased dental equipment on January 1 for $85,230, paying $26,770 in cash and signing a $58,460, 3-year note payable (interest is paid each December 31). The equipment depreciates $620 per month. Interest is $470 per month. Purchased a 1-year malpractice insurance policy on January 1 for $48,000. Purchased $2,160 of dental supplies (recorded as increase to Supplies). On January 31, determined that $530 of supplies were on hand. Prepare the adjusting entries on January 31.

Explanation / Answer

Date Account Titles Debit Credit Jan-31 Receivable from Insurance company 770 Dental service fees 770 Jan-31 Utility Expense 660 Accounts Payables 660 Jan-31 Dental Equipment 85230 3 Year Note Payable 58460 Cash 26770 Jan-31 Depreciation- Equipment 620 Accumulated Depreciation-Equipment 620 Jan-31 Interest 470 Interest Payable 470 Jan-31 Insurance expense (1 Month) 4000 Prepaid Insurance (Bal.11 months) 44000 Cash 48000 Jan-31 Supplies 2160 Cash 2160 Jan-31 Supplies Expense 1630 Supplies 1630

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