The journal entry to close Fees Earned,$750,and Rent Revenue,$175,during the year-end closing process would be
A)Dec. 31 Fees Earned 750Rent Revenue 175Owner's Capital 925
B)Dec. 31 Owner's Capital 925Fees Earned 750Rent Revenue 175
C)Dec. 31 Revenues 925Owner's Capital 925
D)Dec. 31 Owner's Capital 925Revenues 925

Question

Quizplus · Accepted Answer

The journal entry to close Fees Earned and Rent Revenue accounts is to transfer their balances to Owner's Capital account. Therefore, the answer should include a debit to Fees Earned for $750, a debit to Rent Revenue for $175, and a credit to Owner's Capital for $925 ($750 + $175). Option A is the only choice that shows these entries. Option B has the debits and credits in the wrong order. Option C combines both revenues into one account, which is not standard accounting practice. Option D has the debits and credits in the wrong order.

The Journal Entry to Close Fees Earned,$750,and Rent Revenue,$175,during the Year-End