Exercise 36 Pearl Weller DDS opened a dental practice on Jan

Exercise 3-6 Pearl Weller, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $777 of such services was performed but not yet billed to the insurance companies. 2. Utility expenses incurred but not paid prior to January 31 totaled $526. 3. Purchased dental equipment on January 1 for $87,000, paying $20,000 in cash and signing a $67,000, 3-year note payable. (a) The equipment depreciates $388 per month. (b) Interest is $450 per month. 4. Purchased a one-year malpractice insurance policy on January 1 for $11,400. 5. Purchased $1,726 of dental supplies. On January 31, determined that $510 of supplies were on hand. 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 Expenses, and Utilities Payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select \"No entry\" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit 3. (a) 3. (b)

Solution

1

Accounts Receivable

777

Service Revenue

777

2

Utilities Expense

526

Utilities Payable

526

3

Depreciation Expense

388

Accumulated Depreciation-Dental Equipment

388

Interest Expense

450

Interest Payable

450

4

Insurance Expense

950

Prepaid Insurance

950

5

Supplies Expense

1216

Supplies

1216

Explanation:

4. 11400/12 = 950

5. 1726 – 510 = 1216

1	Accounts Receivable	777
	Service Revenue		777
2	Utilities Expense	526
	Utilities Payable		526
3	Depreciation Expense	388
	Accumulated Depreciation-Dental Equipment		388
	Interest Expense	450
	Interest Payable		450
4	Insurance Expense	950
	Prepaid Insurance		950
5	Supplies Expense	1216
	Supplies		1216