On December 31, the Income Summary account of Madison Company has a debit balance of $25,000 after revenue of $27,000 and expenses of $52,000 were closed to the account. Madison Wells, Drawing has a debit balance of $2,800 and Madison Wells, Capital has a credit balance of $46,000.

Required:

1. Record the journal entries necessary to complete closing the accounts.
2. What is the new balance of Madison Wells, Capital?

1 Record the closing entry for the balance of income summary.

2 Record the closing entry for the drawing account.