Recording Closing Entries

Lakeside Inc. reports balances in the following temporary accounts on December 31, 2020. Prepare closing entries as of December 31, 2020. Assume that the company uses the income summary account as a temporary clearing account for revenues, expenses, gains, and losses.

Account	Dec 31, 2020
Service revenue	$150,000
Operating expenses	90,000
Interest revenue	3,750
Interest expense	4,500
Income tax expense	17,775
Dividends	7,500

General Journal
Account Name	Dr.	Cr.
Service Revenue
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
To close revenues to income summary.
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
Operating Expenses
Interest Expense
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
To close expenses to income summary.
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
To close income summary to retained earnings.
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
Retained EarningsCommon StockInterest RevenueService RevenueIncome Tax ExpenseInterest ExpenseOperating ExpensesIncome SummaryDividends
To close dividends to retained earnings.