Answer:
Sales 8,000,000 DEBIT
Gain from the sale of investments 100,000 DEBIT
Income Summary 8,100,000 CREDIT
--to close revenues and earnings account
Income Summary 8,250,000 DEBIT
Cost of goods sold 6,500,000 CREDIT
Salaries expense 300,000 CREDIT
Other administrative expenses 100,000 CREDIT
Interest expense 900,000 CREDIT
Advertising expense 450,000 CREDIT
--to close expenses account
Retained Earnings 150,000 DEBIT
Income Summary 150,000 CREDIT
Explanation:
To close the accounts we use the income summary account as an auxiliar tool
The revenues and gains have a normla balance of credit thus, we debit to close them
The expenses are normal balance debit so we credit them against income summary.
Last we transfer the Income Summary account into retained earnings.
