The required Journal Entries that are required to close the book for the selected four accounts at year-end include the following:
Journal Entries:
December 31,
Debit Fees earned revenue $65,000
Credit Income Summary $65,000
To close the Fees revenue to income summary.
Debit Income Summary $34,500
Credit Selling expenses $34,500
To close the selling expenses to income summary.
Debit Income Summary $12,750
Credit Administrative expenses $12,750
To close the administrative expenses to income summary.
Debit Income Summary $1,250
Credit Miscellaneous expense $1,250
To close the miscellaneous expenses to income summary.
Data Analysis:
1. Accounts to be closed to Income Summary are:
Fees earned revenue $65,000 Income Summary $65,000
Income Summary $34,500 Selling expenses $34,500
Income Summary $12,750 Administrative expenses $12,750
Income Summary $1,250 Miscellaneous expense $1,250
2. Assets and Liabilities accounts:
Accounts receivable $45,000
Prepaid insurance 4,500
Land 50,000
Accounts payable 39,000
Notes payable 55,000
Retained earnings 12,000
Closed to Retained earnings: Dividends 2,000
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