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    kosky52's Avatar
    kosky52 Posts: 1, Reputation: 1
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    #1

    Feb 17, 2009, 07:47 PM
    Journalizing transaction
    Otis Carpenter opened a medical practice in Alexandria, VA

    Sept 1 The business received $33,000 cash and gave capital to the owner.

    Sept 2 Purchased medical supplies on account $7,000

    Sept 2 Paid monthly office rent of $3,700

    Sept 3 Recorded $10,000 revenue for service rendered to patients on account.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Feb 18, 2009, 02:08 PM

    Sep 1. Where did the cash come from?
    If from a loan, then the entry is:
    Debit Cash for the amount
    Credit Notes Payable for the amount

    If the owner invested the cash, then the entry is:
    Debit Cash for the amount
    Credit Owner's Equity for the amount

    Sep 2:
    Debit Medical Supplies for the amount
    Credit Accounts Payable for the amount

    Sep 2:
    Debit Rent Expense for the amount
    Credit Cash for the amount

    Sep 3:
    Debit Accounts Receivable for the amount
    Credit Service Revenue for the amount

    I am assuming this is a for profit company.

    Medical companies usually follow Non-profit or Govenmental accounting.

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