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.

Prepare the adjusting entries on January 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

1. Performed services for patients who had dental plan insurance. At January 31, $760 of such services was completed but not yet billed to the insurance companies. 2. Utility expenses incurred but not paid prior to January 31 totaled $840. 3. Purchased dental equipment on January 1 for $89,490, paying $23,010 in cash and signing a $66,480, 3-year note payable (interest is paid each December 31). The equipment depreciates $550 per month. Interest is $520 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $36,000. 5. Purchased $2,200 of dental supplies (recorded as increase to Supplies). On January 31, determined that $630 of supplies were on hand.

Explanation / Answer

Solution:

Adjusting Journal Entries on January 31:

No Account Titles and Explanation Debit Credit 1 Accounts Receivable 760 Revenue from Dental Services 760 2 Utilities Expenses 840 Accounts Payable 840 3 Depreciation Expense 550 Accumulated Depreciation - Dental Equipment 550 [To record depreciation on the equipment Interest Expense 520 Interest Payable 520 [To record accrued interest on the note payable] 4 Insurance Expense 3,000 Prepaid Insurance 3,000 [On January 1, Prepaid Insurance was debited for the $36,000 one-year premium. The adjusting entry for $3,000 is made to record one month's coverage lapsing] 5 Supplies Expense 1,570 Supplies 1,570 [$2,200 - $630] Purchases made for $2,200 and ending balance is $630, which means consumed

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.