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Piper Rental Agency and Andy Wright, D.D.S.

Please assist with practice question. Please show step by step.

The ledger of Piper Rental Agency on March 31 of the current year includes the following
selected accounts before adjusting entries have been prepared.

Debit Credit Debit Credit
Prepaid Insurance 3,600.00
Supplies 2,800.00
Equipment 25,000.00
Accumulated Depreciation?Equipment 8,400.00
Notes Payable 20,000.00
Unearned Rent 9,900.00
Rent Revenue 60,000.00
Interest Expense -0-
Wages Expense 14,000.00

An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.
Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and
Supplies Expense.

Prepare adjusting entries from selected account data.

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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Solution Preview

The ledger of Piper Rental Agency on March 31 of the current year includes the following
selected accounts before adjusting entries have been prepared.

Debit Credit Debit Credit
Prepaid Insurance 3,600.00
Supplies 2,800.00
Equipment 25,000.00
Accumulated Depreciation-Equipment 8,400.00
Notes Payable 20,000.00
Unearned Rent 9,900.00
Rent Revenue 60,000.00
Interest Expense -0-
Wages Expense 14,000.00

An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the ...

Solution Summary

This solution is comprised of a detailed explanation to prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.

$2.19