Exercise 410 Larkspur Inc opened an incorporated dental prac

Exercise 4-10

Larkspur, Inc., opened an incorporated dental practice on January 1, 2017. During the first month of operations, the following transactions occurred.

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 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Debit

Credit

1.		Performed services for patients who had dental plan insurance. At January 31, $770 of such services was completed but not yet billed to the insurance companies.
2.		Utility expenses incurred but not paid prior to January 31 totaled $780.
3.		Purchased dental equipment on January 1 for $86,500, paying $22,200 in cash and signing a $64,300, 3-year note payable (interest is paid each December 31). The equipment depreciates $530 per month. Interest is $690 per month.
4.		Purchased a 1-year malpractice insurance policy on January 1 for $24,000.
5.		Purchased $2,650 of dental supplies (recorded as increase to Supplies). On January 31, determined that $500 of supplies were on hand.

Solution

1 31-Jan Accounts receivable 770      Service revenue 770 2 31-Jan Utilities expense 780       Accounts payable 780 3 31-Jan Depreciation expense 530        Accumulated depreciation-equipment 530 Interest expense 690        Interest payable 690 4 31-Jan Insurance expense 2000 =24000/12        Prepaid insurance 2000 5 31-Jan Supplies expense 2150 =2650-500        Supplies 2150