Question

I need explanation on how to get the answers thank you.

The following is a list of accounts and their balances (all normal balances) as of September 30, 2018 for Carson Corporation. All adjusting entries have been made and are included in the balances.

Cash ................................................................ $35,610

Depreciation expense .......................................... 1,440

Accounts receivable........................................... 24,200

Prepaid insurance ................................................ 6,000

Service revenue ................................................. 29,520

Supplies............................................................... 1,800

Rent expense....................................................... 4,320

Accumulated depreciation – equipment................ 3,840

Accounts payable............................................... 13,200

Unearned service revenue ................................. 11,760

Interest expense .................................................. 1,750

Common shares................................................. 32,400

Retained earnings.............................................. 20,400

Dividends ............................................................. 1,200

Equipment.......................................................... 24,000

Salary expense .................................................... 9,840

Utilities expense........................................................ 960

REQUIRED: Prepare the closing journal entries for Carson Corporation.

Date	Account Titles	Debit	Credit
September 30, 2018	Service revenue	$     29,520
	Income summary		$   29,520
	(to close revenue account)
September 30, 2018	Income summary	$     18,310
	Depreciation expense		$ 1, 440
	Rent expenses		$ 4, 320
	Interest expenses		$ 1, 750
	Salary expenses		$ 9, 840
	Utilities expenses		$ 960
	(to close expenses account)
September 30, 2018	Income summary	$ 11, 210
	Retained earnings		11, 210
	(to adjust net income to retained earnings) (Refer Note 1)

Answer 1

Closing journal entries are recorded at the end of the accounting period inorder to close the temporary accounts such as revenues and expenses accounts. The balance in temporary accounts will be posted into permanent accounts. Revenue accounts given in the problem are Service Revenue. Expenses accounts are Depreciation expense, Rent expense, Interest expense, Salary expense and Utilities expense. These are closed and transferred to permanent account (retained earnings ) through income summary. Credits Closing Journal entries :- Date Accounts Title & Explanation 30-Sep-18 Service Revenue To Income Summary (Entry for closure of revenue accounts) Debit S 29,250 29,250 18,310 30-Sep-18 Income Summary To Depreciation expense To Rent expense To Interest expense To Salary expense To Utilities expense (Entry for closure of expense accounts) 1,440 4,320 1,750 9,840 960 10,940 30-Sep-18 Income summary To Retained earnings (Entry for transfer of net income to retained earnings) 10,940 1,200 30-Sep-18 Retained earnings To Dividends (Entry for transfer of dividends to retained earnings) 1,200