Jennifer Davis of DDS opened a dental practice on January 1, 2020. The following procedures were performed in the first month of the operations.

1. Served patients with dental plan insurance. As of January 31st, $797 of such services were provided but not yet invoiced to the insurance companies.

2. Service expenses incurred but not paid before January 31st totaled $469.

3. Purchased dental equipment for $75,000 on January 1st, paid $20,000 in cash and signed $55,000 in 3-year promissory notes. (a) Equipment depreciates $383 per month. (b) Interest is $450 per month.

4. Purchased one year malpractice insurance for $11,400 on Jan. 1st.

5. Purchased $1,529 of dental supplies. On January 31, he determined that $470 of material was ready.

Required

Prepare the adjustment entries on January 31st. The account headings are Accumulated Depreciation—Hardware, Depreciation Expense, Service Income, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Materials, Materials Expenses, Utilities Expenses, and Accounts Payable.

Answer rating: 100% (QA)

Adjustment entries are made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate period Here ... View the full answer