Karen Tong, D.D.S., opened a dental practice on January 1, 2002. During the first month of operations the following transactions occured.
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such services was earned but not yet billed to the insurance companies.
2. Utility expenses incurrred but not paid prior to January 31 totaled $520.
3.Purchased dental equipment on January 1 for $80,000, paying $20,00 in chas 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 $700 of supplies were on hand.
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.
This problem involves the fundamentals of accounting