Beachside Realty rents condominiums and furnishings. The adjusted trial balance on December $31$ follows:

Debit Credit

Cash $1,500$

Accounts Receivable $2,000$

Interest Receivable $100$

Prepaid Insurance $1,600$

Notes Receivable $($long$-$term$)2,800$

Equipment $15,000$

Accumulated Depreciation $3,000$

Accounts Payable $2,400$

Accrued Expenses Payable $3,920$

Income Taxes Payable $2,700$

Unearned Rent Fees $500$

Common Stock $5,000$

Retained Earnings $2,700$

Dividends $2,000$

Rent Fees Earned $37,000$

Furniture Rental Revenue $1,200$

Interest Revenue $100$

Wages Expense $19,000$

Depreciation Expense $1,800$

Utilities Expense $320$

Insurance Expense $700$

Maintenance Expense $9,000$

Income Tax Expense $2,700$

Totals $58,52058,520$

Explain the first step of the closing process using Beachside Realty's adjusted trial balance.