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Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	8
Accounts Receivable		4
Supplies		4
Equipment		8
Accumulated Depreciation				$	1
Software		4
Accumulated Amortization					1
Accounts Payable					6
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Taxes Payable					0
Deferred Revenue					0
Common Stock					14
Retained Earnings					6
Service Revenue					0
Depreciation Expense		0
Amortization Expense		0
Salaries and Wages Expense		0
Supplies Expense		0
Interest Expense		0
Income Tax Expense		0
Totals	$	28		$	28

Transactions during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $24 cash on July 1, 2018, signing a six-month note payable.
2. Purchased equipment for $27 cash on July 2, 2018.
3. Issued additional shares of common stock for $4 on July 3.
4. Purchased software on July 4, $4 cash.
5. Purchased supplies on July 5 on account for future use, $6.
6. Recorded revenues on December 6 of $59, including $10 on credit and $49 received in cash.
7. Recognized salaries and wages expense on December 7 of $32; paid in cash.
8. Collected accounts receivable on December 8, $7.
9. Paid accounts payable on December 9, $8.
10. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.

Data for adjusting journal entries on December 31:

11. Amortization for 2018, $1.
12. Supplies of $4 were counted on December 31, 2018.
13. Depreciation for 2018, $2.
14. Accrued interest of $1 on notes payable.
15. Salaries and wages incurred but not yet paid or recorded, $2.
16. Income tax expense for 2018 was $5 and will be paid in 2019.

1. 1, 3, 5 and 8. Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions (a)-(j), adjusting entries (k)-(p), and closing entry. (Enter your answers in thousands of dollars.)

Answer 1

Date	Journal	Debit	Credit
		(In thousands)	(In thousands)
July 1,2018	Cash dr	24
	Note payable cr		24
	(Borrowed through note payable)
July 2,2018	Equipment	27
	Cash		27
	(Purchase of equipment)
July 3,2018	Cash	4
	Common stock		4
	(Issue of common stock)
July 4,2018	Software	4
	Cash		4
	(Purchase of software)
July 5,2018	Supplies	6
	Accounts payable		6
	(Purchase of supplies)
Dec. 6,2018	Cash	49
	Accounts receivable	10
	Service revenue		59
	(revenue recorded)
Dec. 7,2018	Salaries and wages expense	32
	Cash		32
	(Salaries paid)
Dec. 8,2018	Cash	7
	Accounts receivable		7
	(Accounts receivable collected)
Dec. 9,2018	Accounts payable	8
	Cash		8
	(Accounts payable paid)
Dec. 10,2018	Cash	4
	Deferred revenue		4
Adjusting entries
Dec. 31,2018	Amortization expense	1
	Accumulated amortization		1
	(Amortization accounted)
Dec. 31,2018	Supplies expense	4
	Supplies		4
	(Supplies consumed)
Dec. 31,2018	Depreciation expense	2
	Accumulated depreciation		2
	(Depreciation accounted)
Dec. 31,2018	Interest expense	1
	Interest payable		1
	(Accrued interest on notes payable accounted)
Dec. 31,2018	Salaries and wages expense	2
	Salaries and wages payable		2
	(Accrued salaries and wages expense accounted)
Dec. 31,2018	Income tax expense	5
	Income tax payable		5
	(Income tax expense accounted)

Cash
Beg.bal.	8
Note payable	24
Equipment		27
Common stock	4
Software		4
Sales	49
Salaries and wages expense		32
Accounts receivable	7
Accounts payable		8
Deferred revenue	4
End. Bal.	25

Accounts receivabe
Beg.bal.	4
Sales	10
cash received		7
End. Bal.	7

Supplies
Beg.bal.	4
Accounts payable	6
Supplies expense		4
End. Bal.	6

Equipment
Beg.bal.	8
Cash	27	0
End. Bal.	35

Accumulated depreciation
Beg.bal.	-	1
Depreciation expense		2
End. Bal.		3

Software
Beg.bal.	4	0
Cash	4
End. Bal.	8

Accumulated amortization
Beg.bal.		1
Amortization expense		1
End. Bal.	-	2

Accounts payable
Beg.bal.		6
Supplies		6
Cash	8
End. Bal.		4

Notes payable (short term)
Beg.bal.	-
Cash		24
End. Bal.		24

Salaries and wages payable
Beg.bal.	0
Salaries and wages expense		2
End. Bal.		2

Interest payable
Beg.bal.	-
Interest expense		1
End. Bal.		1

Deferred revenue
Beg.bal.	0
Cash		4
End. Bal.		4

Common stock
Beg.bal.	-	14
Cash		4
End. Bal.		18

Retained earnings
Beg.bal.	0	6
End. Bal.		6

Service revenue
Beg.bal.	-
Cash		49
Accounts receivable		10
End. Bal.		59

Salaries and wages expense
Beg.bal.		0
Cash	32
Salaries and wages payable	2
End. Bal.	34

Service revenue
Beg.bal.	-
Cash		38
Accounts receivable		9
End. Bal.		47

Salaries and wages expense
Beg.bal.		0
Cash	21
Salaries and wages payable	4
End. Bal.	25

Depreciation expense
Beg.bal.
Accumulated depreciation	1	0
End. Bal.	1

Amortization expense
Beg.bal.
Accumulated amortization	3	-
End. Bal.	3

Interest expensee
Beg.bal.
Interest payable	1	0
End. Bal.	1

Income tax expense
Beg.bal.
Income tax payable	5
End. Bal.	5

Income tax payable
Beg.bal.
Income tax expense		5
End. Bal.		5