Harrowgate Landscaping Ltd.’s adjusted balances at 31 December include Service Revenue 214,000 and Interest Revenue 600. Record the first closing entry.
Harrowgate Landscaping Ltd.’s adjusted balances at 31 December include Service Revenue 214,000 and Interest Revenue 600. Record the first closing entry.
Answer
Dr Service Revenue 214000; Dr Interest Revenue 600; Cr Income Summary 214600
Accounts - Service Revenue - Interest Revenue - Income Summary - Retained Earnings - Cash Revenues carry credit balances, so each is **debited** to zero — **Service Revenue** 214,000 and **Interest Revenue** 600 — and the total, **214,600**, is credited to **Income Summary**. The trap is crediting **Retained Earnings** directly: revenues and expenses meet in Income Summary first so that its balance can be checked against net income. Cash is untouched by closing.
Hermanson Vol 1 ch 4 (closing entries; the post-closing trial balance); Dauderis & Annand §3.6; OpenStax Accounting Vol 1 §5.2 (concept map F1–F3)