For the year ended December 31, a company has revenues of $330,000 and expenses of $202,500. The company paid $55,200 in dividends during the year. The balance in the Retained earnings account before closing is $94,000. Which of the following entries would be used to close the dividends account?
A. Debit Income Summary $55,200; credit Retained earnings $55,200.
B. Debit Dividends $55,200; credit Retained earnings $55,200.
C. Debit Retained earnings $55,200; credit Dividends $55,200.
D. Debit Retained earnings $94,000; credit Income Summary $94,000.
E. Debit Income Summary $94,000; credit Dividends $94,000.
Answer: C
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