At December 31, 2019, the ledger of Aulani Company includes the following accounts, all having normal balances: Sales Revenue, $59,000; Cost of Goods Sold, $31,000; Retained Earnings, $20,000; Interest Expense, $3,200; Dividends, $5,000; Wages Expense $8,000, and Interest Payable, $2,100.
Required:
1. Prepare the closing entries for Aulani at December 31, 2019.
2. How does the closing process affect Aulani's retained earnings?