Question

An organization purchase medical equipment for $90,000. They pay cash at the time of purchase of...

An organization purchase medical equipment for $90,000. They pay cash at the time of purchase of $15,000 and take out a loan with a 5-year payback period for the balance due. Please prepare a journal entry to record this transaction on the accounting records on the accrual basis of accounting.

A clinic provided patient services for the month totaling $100,000. Patients paid $30,000 at the time of service and the remaining balances are due in the future. Please prepare a journal entry that would record these transactions on the cash basis of accounting.

A clinic purchases an CT- machine for $300,000. Using straight line depreciation method, what is the annual depreciation expense that we would record each year on this equipment. Assume the equipment has a useful life of 8 years and a salvage value of 25% at the end of 8 years. Please show all calculations.

A medical center takes out a loan to fund operating expenses for the coming 6 months. The loan is for a total of 85,000. What entry would you make to reflect this loan? Assume accrual accounting

A clinic recorded prepaid expenses of 30,000 when it paid their malpractice insurance for 2013. The original entry was made on the books on 12/31/2012. It is now 06/30/2013 and the clinic is closing the books. What entry will they make to record malpractice insurance expense for the first half of 2013.

Homework Answers

Answer #1

Journal entry to record the acquisition of medical equipment is as follows:

Journal entry to recognize the services provided and cash received is as follows:

Depreciation:

CT Machine cost = $300,000

Useful life = 8 years

Salvage Value = 25% = $300,000 x 25% = $75,000

Annual depreciation expense in SLM = (Cost - Salvage Value)/Useful Life

Annual Depreciation = ($300,000 - $75,000)/8

Annual Depreciation = $28,125 per year.

Entry to reflect the loan taken to fund the future operating expenses is as follows:

Entry to record the insurance expense for the first 6 months is as follows:

.

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