E3-8 Andy Wright, D.D.S., opened a dental practice on January 1,2008. During the first month of operations

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E3-8 Andy Wright, D.D.S., opened a dental practice on January 1,2008. 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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Financial Accounting

ISBN: 9780470128848

6th Edition

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

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