Answer:
Closing Journal Entries:
1. Debit Fees Earned $56,000
Credit Income Statement $56,000
To close the account for the period.
2. Debit Income Statement $25,000
Credit Depreciation Expense $25,000
To close the account for the period.
3. Debit Income Statement $23,000
Credit Salaries Expense $23,000
To close the account for the period.
4. Debit Income Statement (Retained Earnings) $2,000
Credit Dividends $2,000
To close the account for the period.
Explanation:
Closing entries are journal entries that are made to close temporary (periodic) accounts, revenue and expenses to the Income Statement. This paves the way for only permanent accounts to remain for the Balance Sheet. Temporary accounts are not carried forward to the next period unlike permanent accounts.
Closing entries transfer all revenue and expense accounts at the end of an accounting period to an income summary account, for the purpose of calculating the financial performance results (called gross profit and net income or loss) for the period.
