Kay Ong, D.D.S., opened an incorporated dental practice on January 1, 1998. During the first month of

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Kay Ong, D.D.S., opened an incorporated dental practice on January 1, 1998. During the first month of operations the following transactions occurred:

1. Performed services for patients who had dental plan insurance. At January 31, \$750 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 \(\$ 650\).

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 \(\$ 600\) per month.

4. Purchased a 1-year malpractice insurance policy on January 1 for \(\$ 12,000\).

5. Purchased \(\$ 1,800\) of dental supplies. On January 31 determined that \(\$ 500\) of supplies were on hand.

\section*{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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Financial Accounting Tools For Business Decision Making

ISBN: 9780471169192

1st Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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