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    Closing and Reversing Entries

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    On December 31, the adjusted trial balance of Garg Employment Agency shows the following selected data.

    Accounts Receivable $24,000 Commission Revenue
    Interest Expense $7,800 Interest Payable

    Analysis shows that adjusting entries were made to (1) accrue $ 4,200 of commission revenue and (2) accrue
    $ 1,500 interest expense.

    Instructions:

    A. Prepare the closing entries for the temporary accounts in December 31.
    B. Prepare the reversing entries on January 1.
    C. Post the entries in (a) and (b). Rule and balance the accounts (Use T accounts).
    D. Prepare the entries to record (1) the collection of the accrued commissions on January 10 and (2)
    the payment of all interest due ($2,700) on January 15.
    E. Post the entries in (d) to the temporary accounts.

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    https://brainmass.com/business/reversing-entries/closing-and-reversing-entries-116959

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    A. Prepare the closing entries for the temporary accounts in December 31.

    The temporary accounts are closed to the income summary account
    The temporary accounts are the commission revenue and interest expense ( all income statement accounts are temporary accounts)

    Dec. 31 Commission Revenue .............................. 92,000
    Income Summary .............................. 92,000
    31 Income Summary...................................... 7,800
    Interest Expense ............................... 7,800

    B. ...

    Solution Summary

    The solution explains how to prepare closing and reversing entries.

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