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Reconstruct adjusting and closing entries for the month ended September 30 from the T-accounts below.
Prepaid Insurance Accounts Receivable Unearned Revenues
1,350 1,250 1,050
130 275 235
1,220 1,525 815
Wages Payable
385
385

Diane Lin, Capital Diane Lin, Drawing Income Summary Fees Earned
7,000 2,400 5,510 5,000
580 2,400 6,090 275
2,400 0 580 235
4,020 0 5,510 0
Wages Expense Rent Expense Insurance Expense Utilities Expense
3,600 1,880 130 95
385 1,880 130 95
3,985 0 0 0
0

Answer :

Answer:

Fees Earned (Dr.) $7,000

Income Summary (Cr.) $7,000

To close the service revenue

Income Summary (Dr.) $7,275

Wages Expense (Cr.) $385

Insurance Expense (Cr.) $1,250

Rent Expense (Cr.) $5,510

Utilities Expense (Cr.) $130

To close all the expenses

Explanation:

Adjusting and closing entries are performed at the end of month to close all business transactions that incurred during the period. These transaction are kind of reversals to close the debit side which reflects the balances in the period.

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