1. The problem is to prepare a journal entry based on the given accounts and amounts. 2. A journal entry records financial transactions in accounting, showing debits and credits. 3. From the data, we identify revenue, expenses, dividends, and other accounts. 4. The main journal entry for closing the income statement accounts to retained earnings involves: - Debiting all expense accounts and dividends declared to close them. - Crediting revenue accounts to close them. - The net effect is transferred to retained earnings. 5. List of revenue and expenses: - Service revenue: $23800 (credit) - Income tax expense: $590 (debit) - Office expense: $4700 (debit) - Rent expense: $2300 (debit) - Salaries expense: $9400 (debit) - Depreciation expense: $2300 (debit) - Supplies expense: $1500 (debit) - Dividends declared: $4800 (debit) 6. Calculate total expenses and dividends: $$\text{Total expenses} = 590 + 4700 + 2300 + 9400 + 2300 + 1500 = 20890$$ $$\text{Total expenses and dividends} = 20890 + 4800 = 25690$$ 7. Calculate net income (loss): $$\text{Net income} = \text{Service revenue} - \text{Total expenses} = 23800 - 20890 = 2910$$ 8. Prepare the journal entry to close revenue and expenses to retained earnings: \begin{align*} \text{Debit:} & \quad \text{Service revenue} \quad 23800 \\ \text{Credit:} & \quad \text{Income tax expense} \quad 590 \\ & \quad \text{Office expense} \quad 4700 \\ & \quad \text{Rent expense} \quad 2300 \\ & \quad \text{Salaries expense} \quad 9400 \\ & \quad \text{Depreciation expense} \quad 2300 \\ & \quad \text{Supplies expense} \quad 1500 \\ & \quad \text{Dividends declared} \quad 4800 \\ & \quad \text{Retained earnings} \quad 2910 \end{align*} 9. Explanation: We debit revenue to close it, credit expenses and dividends to close them, and credit retained earnings with net income. 10. Final journal entry: $$\text{Debit: Service revenue } 23800$$ $$\text{Credit: Income tax expense } 590$$ $$\text{Credit: Office expense } 4700$$ $$\text{Credit: Rent expense } 2300$$ $$\text{Credit: Salaries expense } 9400$$ $$\text{Credit: Depreciation expense } 2300$$ $$\text{Credit: Supplies expense } 1500$$ $$\text{Credit: Dividends declared } 4800$$ $$\text{Credit: Retained earnings } 2910$$