Preparation of Adjusting Entries on January 31 for Al Medina, D.D.S. is as follows:
Adjusting Journal Entries:
1. Debit Accounts Receivable $760
Credit Service Revenue $760
To record completed services not yet billed.
2. Debit Utility Expenses $450
Credit Utility Payable $450
To record unpaid utility expense for the month.
3. Debit Depreciation Expense $400
Credit Accumulated Depreciation $400
To record depreciation expense for the month.
3. Debit Interest Expense $500
Credit Interest Payable $500
To record interest expense for the month.
4. Debit Insurance Expense $2,000
Credit Prepaid Insurance $2,000
To record insurance expense for the month ($24,000/12).
5. Debit Supplies Expense $1,200
Credit Supplies $1,200
To record supplies expense for the month ($1,750 - $550)
Data Analysis:
Transactions at the end of January:
1. Accounts Receivable $760 Service Revenue $760
2. Utility Expenses $450 Utility Payable $450
3. Equipment $80,000 Cash $20,000 Notes Payable $60,000
3. Depreciation Expense $400 Accumulated Depreciation $400
3. Interest Expense $500 Interest Payable $500
4. Prepaid Insurance $24,000 Cash $24,000
4. Insurance Expense $2,000 Prepaid Insurance $2,000 ($24,000/12)
5. Supplies $1,750 Cash $1,750
5. Supplies Expense $1,200 Supplies $1,200 ($1,750 - $550)
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