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Poet
Poet Asked:

College Accounting

Andy Wright,D.D.S., opened a dental practice on January 1, 2008. During the first month
of operations the following transactions occurred.
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such
services was earned but not yet recorded.
2. Utility expenses incurred but not paid prior to January 31 totaled $520.
3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a
$60,000, 3-year note payable.The equipment depreciates $400 per month. Interest is $500 per
month.
4. Purchased a one-year malpractice insurance policy on January 1 for $12,000.
5. Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were on
hand.
Instructions
Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation—
Dental Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance
Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense,
Utilities Expense, and Utilities Payable.

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Answers

Ccming
Ccming Answered:

Hi, FYI, I'm not sure they are correct.

1. Dr: Accounts receivable $875
    Cr: Service revenue $875
    Dr: Cash $875
    Cr: Accounts receivable $875
2. Dr: Utilities expense $520
    Cr: Accounts payable $520
3. Dr: Dental equipment $80000
    Cr: Accounts payable $80000
    Dr: Accounts payable 20000
    Cr: Cash 20000
    Dr: Accounts payable 60000
    Cr: Notes payable 60000
    Dr: Interest expense 500
    Cr: Bank 500
4. Prepaid insurance 12000
    Bank 12000
5. Supplies 1600
    Bank 1600
    Supplies expense 400
    Supplies 400

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