Question

The year-end adjusted trial balance of Aggies Corporation included the following account balances: Retained Earnings, $220,000; Service Revenue, $850,000; Salaries Expense, $380,000; Rent Expense, $140,000; Interest Expense, $75,000; and Dividends, $50,000. Record the necessary closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer:

Explanation:

The closing entry for the following accounts are shown below:

1. Service Revenue A/c Dr $850,000

                       To Income Summary $850,000

(Being revenue account closed)

2. Income summary A/c Dr $595,000

                To Salaries Expense $380,000

                To Rent Expense $140,000

                 To Interest Expense $75,000

(Being expenses accounts are closed)

3. Income summary A/c Dr $255,000 ($850,000 - $595,000)

              To Retained earning $255,000

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $50,000

                         To Dividend A/c $50,000

(Being dividend account is closed)