Adam Singh, D.D.S., opened an incorporated dental practice on January 1, 2012.
During the first month of operations the following transactions occurred:
1. Performed services for patients who had dental plan insurance. At January 31, $760 of such services was earned but not yet billed to the insurance companies.
2. Utility expenses incurred but not paid prior to January 31 totaled $450.
3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable (Interest is paid each December 31). The equipment depreciates $400 per month. Interest is $500 per month.
4. Purchased a 1-year malpractice insurance policy on January 1 for $24,000.
5. Purchased $1,750 of dental supplies (recorded as increase to Supplies). On January
31 determined that $550 of supplies were on hand.
Instructions
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 Expense, and Utilities Payable.