Prepare the closing entries for the temporary accounts

Assignment Help Financial Accounting

Reference no: EM131256715

On December 31, the adjusted trial balance of Employment Agency shows the following selected data.

Accounts Receivable $23,200 Service Revenue $92,500

Interest Expense 7,400 Interest Payable 1,200

Analysis shows that adjusting entries were made to (1) accrue $6,900 of service revenue and (2) accrue $1,200 interest expense.

(a) Prepare the closing entries for the temporary accounts shown above at December 31.

Debit

Credit

Service Revenue 92500

Income Summary 92500

(To close the revenue account.)

Income Summary 7400

Interest Expense 7400

(To close the expense account.)

(b) Prepare the reversing entries on January 1.

(To reverse the accrued service revenue.)

(To reverse the accrued interest expense.)

Reference no: EM131256715

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