Question

The ledger of Mai Company includes the following accounts with normal balances: Common Stock,

\(9,000; Dividends, \)800; Services Revenue, \(13,000; Wages Expense, \)8,400; and Rent Expense, $1,600.

Prepare the necessary closing entries from the available information at December 31.

Short answer

Answer:

Journal entries in the books of Mai company are shown in step 2.

Step-by-step solution

Step-by-Step Solution

Step 1: Definition of wage expense

The expenses that occurred during the payment of wages is known as wage expense.

Necessary closing entries

	Journal entry
Date	Particulars	Debit	Credit
December 31	Income Summary	$10,000
	Rent Expense		$1,600
	Wage Expense		$8,400
	(Being closing entry of rent and wages)
December 31	Service Revenue	$13,000
	Income Summary		$13,000
	(Closing entry of service revenue)
December 31	Income Summary Retain Earning	$3,000
	Income summary		$3,000
	(Entry of profit)
December 31	Retained Earnings	$800
	Dividend		$800
	(Closing entry of dividend)