Question

Given the following adjusted account balances (all normal), prepare the closing journal entries for Ezzy Holdings on December 31, 2018.

Cash                       45,000       Prepaid rent          9,000            Garth Gaudette, Capital        85,000

Land                        65,000       Service revenue     75,500            Unearned service revenue    24,000

Supplies                  4,000      Interest expense    5,000            Amortization expense           15,000

Rent expense          12,500       Salary expense      46,000            Garth Gaudette, Withdrawals     20,000

Note payable           70,000       Interest payable     3,000           Acc. amortization, building     15,000     

Supplies expense     8,000      Building                85,000            Accounts receivable             32,000

Accounts payable    33,000       Interest revenue         500

                              

Answer 1

Closing entries:

Date	Account title and Explanation	Debit	Credit
Dec 31,2018	Service revenue	75,500
	Interest revenue	500
	Income summary		76,000
	[To close revenue accounts]
Dec 31,2018	Income summary	86,500
	Rent expense		12,500
	Supplies expense		8,000
	Interest expense		5,000
	Salary expense		46,000
	Amortization Expense		15,000
	[To close expenses accounts]
Dec 31,2018	Garth Gaudette, Capital	10,500
	Income summary [86500-76000]		10,500
	[To close income summary account]
Dec 31,2018	Garth Gaudette, Capital	20,000
	Garth Gaudette, Withdrawals		20,000
	[To close withdrawals account]