Question

Below is the income statement for Red Storm Cleaners for the year ended December 31, 2020. During 2020, dividends paid by Red Storm Cleaners were $1,100.  Write down the closing entries for Red Storm Cleaners.

Red Storm Cleaners Income Statement For the year ended December 31, 2020
Service revenue	$60,000
Expenses:
Salaries expense	19,600
Repairs and maintenance expense	13,000
Interest expense	5,000
Supplies Expense	2,800
Total expenses	40,400
Net income	$19,600

Answer 1

	Journal entries
No.	ACCOUNT TITLES AND EXPLANATIONS	DEBIT ($)	CREDIT ($)
December 31	Service Revenue	60,000.00
	Income Summary		60,000.00
	(To close revenue accounts)
December 31	Income Summary	40,400.00
	Salaries expense		19,600.00
	Repairs and maintenance expense		13,000.00
	Interest expense		5,000.00
	Supplies Expense		2,800.00
	(To close expense accounts)
December 31	Income Summary	19,600.00
	Retained Earnings		19,600.00
	(To close net income / (loss))
December 31	Retained Earnings	1,100.00
	Dividends		1,100.00
	(To close dividends)