To determine the correct journal entry for closing revenues, follow these steps:
1. Identify the revenue account that needs to be closed. In this case, the account is "Service Revenue."
2. The typical approach to close the revenue account involves debiting the revenue account and crediting the retained earnings or income summary account.
From the adjusted trial balance:
- Service Revenue has a credit balance of [tex]$7,700.00.
To close the revenue account:
- Debit Service Revenue for $[/tex]7,700.00.
- Credit Retained Earnings (or Income Summary) for the same amount.
Here is the detailed journal entry for closing revenues:
Journal Entry:
| Date | Accounts | Debit | Credit |
|------------|---------------------------|----------|----------|
| Month/Year | Service Revenue | \[tex]$7,700.00 | |
| | Retained Earnings | | \$[/tex]7,700.00 |
Therefore, the correct journal entry involves debiting Service Revenue and crediting Retained Earnings (or Income Summary) by $7,700.00 each.
