Question

3-2) Pearl Weller, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred.

1. Performed services for patients who had dental plan insurance. At January 31, $777 of such services was performed but not yet billed to the insurance companies.

2. Utility expenses incurred but not paid prior to January 31 totaled $526.

3. Purchased dental equipment on January 1 for $87,000, paying $20,000 in cash and signing a $67,000, 3-year note payable. (a) The equipment depreciates $388 per month. (b) Interest is $450 per month.

4. Purchased a one-year malpractice insurance policy on January 1 for $11,400.

5. Purchased $1,726 of dental supplies. On January 31, determined that $510 of supplies were on hand.

Prepare the adjusting entries on January 31. Account titles are Accumulated Depreciation-Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expenses, and Utilities Payable.

Answer 1

Adjusting entry :

Transaction	Account and explanation	debit	credit
1	Account receivable	777
	Service revenue		777
	(To record service revenue)
2	Utilities expense	526
	Utilities payable		526
	(To record utilities expense)
3	Depreciation expense	388
	Accumulated Depreciation-Equipment		388
	(To record depreciation expense)
	Interest expense	450
	Interest payable		450
	(To record accured interest)
4	Insurance expense (11400/12)	950
	Prepaid insurance		950
	(To record insurance expense)
5	Supplies expense (1726-510)	1216
	Supplies		1216
	(To record supplies expense)