Question

The company's adjusted trial balance includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances.
Required:
Prepare the first closing entry.

No Date General Journal Debit Credit
1 Dec 31 No Transaction recorded

Answer 1

Answer:

Dr Fees Earned $56,000

Cr Income summary $56,000

Explanation:

Preparation of the first closing entry.

Based on the information given we were told that Fees Earned has the amount of $56,000 which means that Fees earned of the amount of $56,000 will be the first closing entry to close revenue account , and we are going to record the first Closing entry by Debiting Fees Earned with the amount of $56,000 and to Crediting Income summary with the same amount of $56,000

31 Dec

Dr Fees Earned $56,000

Cr Income summary $56,000

(To close revenue account)