Exercise 3-8
Andy Wright,D.D.S., opened a dental practice on January 1,
2010. 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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