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St. Joseph’s Hospital began operations in December 2016 and had patient service revenues totaling $1,050,000 (based...

St. Joseph’s Hospital began operations in December 2016 and had patient service revenues totaling $1,050,000 (based on customary rates) for the month. Of this, $129,000 is billed to patients, representing their insurance deductibles and co-payments. The balance is billed to third-party payers, including insurance companies and government health care agencies. St. Joseph estimates that 20 percent of these third-party payer charges will be deducted by contractual adjustment. The Hospital’s fiscal year ends on December 31.

Required:
1. Prepare the journal entries for December 2016. Assume that 15 percent of the amounts billed to patients will be uncollectible.
2. Prepare the journal entries for 2017 assuming the following:

a. $109,000 is collected from the patients during the year and $10,400 is written off.

b. Actual contractual adjustments total $216,000. The remaining receivable from third-party payers is collected.

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