Splish Brothers Inc., opened an incorporated dental practice on January 1, 2022. During the first month of operations, the following transactions occurred. 1. 2. 3. Performed services for patients who had dental plan insurance. At January 31, $900 of such services was completed but not yet billed to the insurance companies. Utility expenses incurred but not paid prior to January 31 totaled $530. Purchased dental equipment on January 1 for $82,600, paying $23,200 in cash and signing a $59,400, 3-year note payable (interest is paid each December 31). The equipment depreciates $580 per month. Interest is $470 per month. Purchased a 1-year malpractice insurance policy on January 1 for $24,000. Purchased $1,940 of dental supplies (recorded as increase to Supplies). On January 31, determined that $600 of supplies were on hand. 4. 5. 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 Accounts Payable. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Debit Credit No. Date Account Titles and Explanation Jan. 1. 31 2. Jan. 31 3. Jan. 31 (To record depreciation expense) (To record interest expense) 4. Jan. 31 5. Jan. 31 Current Attempt in Progress Identify the accounting concept that describes each situation below. Do not use any concept more than once. a. Is the rationale for why plant assets are not reported at liquidation value. (Do not use the historical cost principle.) Indicates that personal and business recordkeeping should be separately maintained. b. d. Ensures that all relevant financial information is reported. Assumes that the dollar is the "measuring stick used to report on financial performance. Requires that accounting standards be followed for all items of significant size. e. f. Separates financial information into time periods for reporting purposes. Requires recognition of expenses in the same period as related revenues. h. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. e Textbook and Media Save for Later Attemp Materiality Monetary unit assumption Expense recognition principle Periodicity assumption Full disclosure principle Economic entity assumption Cost constraint Going concern assumption Historical cost principle Revenue recognition principle View Policies Current Attempt in Progress The ledger of Pharoah Company on July 31, 2022, includes the selected accounts below before adjusting entries have been prepared. Credit Investment in Note Receivable Supplies Prepaid Rent Buildings Accumulated Depreciation-Buildings Unearned Service Revenue Debit $24.000 24,000 4,200 290,000 $120,000 11,900 An analysis of the company's accounts shows the following. 1. 2. 3. 4. The investment in the notes receivable earns interest at a rate of 12% per year. Supplies on hand at the end of the month totaled $16,800. The balance in Prepaid Rent represents 4 months of rent costs. Employees were owed $3,500 related to unpaid salaries and wages. Depreciation on buildings is $5,040 per year. During the month, the company satisfied obligations worth $4.600 related to the Unearned Services Revenue. Unpaid maintenance and repairs costs were $2,250. 5. 6. 7. No. Debit Credit Date Account Titles and Explanation July 31 1. 2. July 31 3. July 31 4. July 31 5. July 31 6. July 31 7. July 31