Question

Crimson Tide Music Academy offers lessons in playing a wide range of musical instruments. The unadjusted trial balance as of December 31, 2018, appears below. December 31 is the company's fiscal year-end.

Accounts	Debits			Credits
Cash	$	10,300
Accounts Receivable		9,500
Supplies		2,000
Prepaid Rent		7,200
Equipment		90,000
Accumulated Depreciation				$	12,000
Accounts Payable					7,700
Salaries Payable					0
Interest Payable					0
Utilities Payable					0
Notes Payable					20,000
Common Stock					45,000
Retained Earnings					19,000
Service Revenue					42,200
Salaries Expense		24,500
Interest Expense		0
Rent Expense		0
Supplies Expense		0
Utilities Expense		2,400
Depreciation Expense		0
Totals	$	145,900		$	145,900

   

Information necessary to prepare the year-end adjusting entries appears below.

a. Depreciation of equipment for the year is $6,000.

b. Accrued salaries at year-end should be $2,100.

c. Crimson Tide borrows $20,000 on September 1, 2018. The principal is due to be repaid in four years. Interest is payable each August 31 at an annual rate of 12%.

d. Unused supplies at year-end total $700. Crimson Tide debits Supplies at the time supplies are purchased.

e. Crimson Tide opens a second studio by paying for one year of rent in advance on April 1, 2018, for $7,200 ($600 per month) debiting Prepaid Rent.

f. Unpaid utilities for December total $200.

Question: Record closing entries.

Journal entry worksheet

Record the entry to close the revenue accounts.

Note: Enter debits before credits.

	Date General Journal Debit Credit December 31, 2018

Answer 1

journal entries					adjusted trial balance
date	explanation	debit	credit		Accounts	Debits			Credits
31-Dec	depreciation expense	6000			Cash	$	10,300
	accumulated depreciation-equipment		6000		Accounts Receivable		9,500
					Supplies		700
31-Dec	salaries expense	2100			Prepaid Rent		1,800
	Salaries Payable		2100		Equipment		90,000
					Accumulated Depreciation				$	18,000
31-Dec	interest expense	800			Accounts Payable					7,700
	interest payable		800		Salaries Payable					2100
					Interest Payable					800
31-Dec	supplies expense	1300			Utilities Payable					200
	supplies		1300		Notes Payable					20,000
					Common Stock					45,000
31-Dec	rent expense	5400			Retained Earnings					19,000
	prepaid rent		5400		Service Revenue					42,200
					Salaries Expense		26,600
31-Dec	utilities expense	200			Interest Expense		800
	utilities expense payable		200		Rent Expense		5400
					Supplies Expense		1300
closing entries					Utilities Expense		2,600
31-Dec	Service Revenue	42,200			Depreciation Expense		6000
	income summary		42,200
					Totals	$	155,000		$	155,000
31-Dec	income summary	42,700
	Salaries Expense		26,600
	Interest Expense		800
	Rent Expense		5400
	Supplies Expense		1300
	Utilities Expense		2,600
	Depreciation Expense		6000
31-Dec	retained earning	500
	income summary		500