Question - Greg Mabasa, B.D.S., opened a dental practice on 1 January 2012. During the first month of operations the following transactions occurred.
1. Performed services for patients who had dental plan insurance. At 31 January, $885 of such services was earned but not yet recorded.
2. Utility expenses incurred but not paid prior to 31 January totalled $520.
3. Purchased dental equipment on 1 January 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 1 January for $18,000.
5. Purchased $1,900 of dental supplies. On 31 January, determined that $600 of supplies were on hand.
Instructions - Prepare the adjusting entries on 31 January. 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.