Karen Tong, D.D.S., opened a flower shop on January 1, 2004. During the first month of operations the following transactions occurred. LO6 1. Performed services for hotel clients. At January 31, $875 of such services was earned but not yet billed to the hotel companies.

2. Utility expenses incurred but not paid prior to January 31 totaled $520.

3. Purchased furniture on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The furniture depreciates $400 per month. Interest is $500 per month.

4. Purchased a one-year insurance policy on January 1 for $12,000.

5. Purchased $1,600 of 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—

Furniture, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Utilities Payable.