Karen Tong, D.D.S., opened a dental practice on January 1, 2002. During the first month of operations the following transactions occured.
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such services was earned but not yet billed to the insurance companies.
2. Utility expenses incurrred but not paid prior to January 31 totaled $520.
3. Purchased dental equipment on January 1 for $80,000, paying $20,00 in chas 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 $700 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.