Question

On December 31, 2018 the adjusted trial balance of the Yellin Personnel Agency shows the following selected data: Accounts Receivable, $8,000 Service Revenue, $60,000 Interest Expense, $10,500 Interest Payable, $3,500 Utilities Expense, $4,800 Accounts Payable, $2,700 Analysis indicates that adjusting entries were made for (a) $8,000 of employment commission revenue earned but not billed, (b) $3,500 of accrued but unpaid interest, and (c) $2,700 of utilities expense accrued but not paid. Prepare the closing entries at December 31, 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Service Revenue 60,000 60,000 Income Summary (To close revenue account.) Interest Expense 10,500 (To close expense accounts) (To close net income to retained earnings)

Answer 1

Yellin Personnel Agency Requirement a Closing Enteries Trans. Particulars 1 Service Revenue a/c To Income Summary Dr. Debit in $ Credit in 60000 60000 Dr. 15300 Income Summary a/c To Interest Expense To Utilities Expense 10500 4800 3 Dr. 44700 Income Summary a/c To Owner's Capital 44700 Requirement b Reversing Enteries Trans. Particulars 1 Service Revenue a/c To Accounts Receivable Dr. Debit in $ Credit in 8000 8000 2 Dr 3500 Interest Payable a/c To Interest Expense 3500 3 Dr. 2700 Accounts Payable a/c To Utilities Expense 2700 Requirement d Journal Enteries Date Particulars Jan-08 Cash alc To Service Revenue Dr. Debit in $ Credit in 8000 8000 Jan-10 Dr. Utilities Expense a/c To Cash 2700 2700 Jan-15 D r. 4000 Interest Expense alc To Cash 4000

Requirement & e (A) Accounts Receivable 8000 (R) 8000 (C) (R) Service Revenue 60000 (A) 8000 (D) 60000 8000 Interest Expense 10500|(C) 4000(R) D 10500 3500 (R) Interest Payable 3500 (A) 3500 Utilities Expense 4800|(C) 2700(R) Accounts Payable 2700(A) (A) (D) (R) 2700 4800 2700 C = Closing R = Reversing A = Adjusted trial balance amount D = January Transaction entries Requirement f Interest expense for January is $500 = ($4,000 - $3,500).