INSTRUCTIONS: Take a look at the income statement accounts on the right They are all located in owner's equity Our task is to move the net income into the Capital account. The idea is, if you own a company and it makes a profit, you get to keep it FOUR CLOSING ENTRIES Here are the journal entries to close the net income into the capital account: 1 Close all revenues into the Income Summary account: Service Revenue Interest Revenue 50,000 2,000 52,000 Income Summary Make the debit and credit entries to the T-accounts and note the effect The revenues are now zero and the total revenues are in Income Summary 2 Close all expenses to the Income Summary account: Income Summary 40,000 Supplies Expense Insurance Expense Wages Expense Depreciation Expense 4,000 2,000 28,000 6,000 Make the debit and credit entries to the T-accounts and note the effect At this point, all revenues-0, all expenses O and Income Summary is equal to the net income, $12,000 3 Debit Income Summary for its balance of 12.000 and credit Benson Capital. Income Summary 12,000 12,000 Benson Capital Make the debit and credit entries to the T-accounts and note the effect At this point, all revenues, expenses, and Income Summary are at O, AND he net income is in the Capital account Service Revenue 4,000 50,000 A,00 750,000 Insurance Expense Interest Revenue 2,000 2000 2,000 Wages Expense Income Summary 28,000 12,000 73,000 Depreciation Expense 6,000 6,000