Question
[The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Accounts
[The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances: Accounts Debit Credit Cash $ 11,200 Accounts Receivable 34,000 Allowance for Uncollectible Accounts $ 1,800 Inventory 152,000 Land 67,300 Buildings 120,000 Accumulated Depreciation 9,600 Accounts Payable 17,700 Common Stock 200,000 Retained Earnings 155,400 Totals $ 384,500 $ 384,500 During January 2021, the following transactions occur: January 1 Borrow $100,000 from Captive Credit Corporation. The installment note bears interest at 7% annually and matures in 5 years. Payments of $1,980 are required at the end of each month for 60 months. January 4 Receive $31,000 from customers on accounts receivable. January 10 Pay cash on accounts payable, $11,000. January 15 Pay cash for salaries, $28,900. January 30 Firework sales for the month total of $195,000. Sales include $65,000 for cash and $130,000 on account. The cost of the units sold is $112,500. January 31 Pay the first monthly installment of $1,980 related to the $100,000 borrowed on January 1. Round your interest calculation to the nearest dollar.
What are the closing journal entries for revenue and expenses?
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