Question

Exercise 4-19 a-e On December 31, the adjusted trial balance of Culver Employment Agency shows the following selected data. Accounts Receivable Interest Expense $24,900 7,800 Service Revenue Interest Payable $91,500 2,900 Analysis shows that adjusting entries were made to (1) accrue $6,000 of service revenue and (2) accrue $2,900 interest expense. Prepare the closing entries for the temporary accounts shown above at December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit | Dec. 31 ^ Service Revenue 91500 Income Summary 91500 (To close the revenue account.) Dec. 31 ^ Income Summary 7800 Interest Expense 7800 (To close the expense account.)

Answer 1

Culver Employment Agency Requirement a Requirement c Accounts Receivable 6000 (R) (A) 6000 (C) Closing Enteries Date Particulars Dec-31 Service Revenue a/c To Income Summary (Revenue accounts closed) Service Revenue 91500 (A) 6000 (D) Debit in $ Credit in $ 91500 91500 91500 6000 Dr. (A) Interest Expense 7800 (C) 3700 (R) Interest Payable 2900 (A) (R) 2900 7800 2900 Dr. 7800 (D) Dec-31 Income Summary a/c To Interest Expense (Expense accounts closed) 7800 Dr. 83700 Dec-31 Income Summary a/c To Owner's Capital (Profits transferred) 83700 Legend A = Adjusted trial balance amount C = Closing R = Reversing D = January Transaction entries Requirement b Reversing Enteries Date Particulars Jan-01 Service Revenue a/c To Accounts Receivable (Revenue account reversed) Dr. Debit in $ Credit in $ 6000 6000 2900 Jan-01 Interest Payable a/c Dr. To Interest Expense (Interest expense account reversed) 2900 Requirement d Date Particulars Jan-10 Cash a/c To Service Revenue (Revenue earned) Dr. Debit in $ Credit in $ 6000 6000 Jan-15 Dr. 3700 Interest Expense a/c To Cash (Interest paid) 3700