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many thanks for your invention invitation please find the next entry to close the draw ( withdrawals )
Dr Cr
Owner capital 5000
drawing account 5000
Owners Capital a/c Dr.
To Drawings a/c
Drawings reduces the owner 's investment and as such to close the accounts you need to debit the owners capital (equity) and credit the drawings account.
If your business is a sole proprietorship or partnership, close the drawing accounts (if any) by preparing a journal entry that credits the drawing account and debits the owner's equity account.
The journal entry to close the drawing or withdrawal account of a sole proprietorship includes a debit to the owner's capital account and a credit to the drawing account. To illustrate the closing entry, let's assume that at the end of the accounting year the account Eve Jones, Drawing has a debit balance of $24,000
Capital account Dr.
Drawing Dr.
The accounting entry for this is debit to the owner's capital account and a credit to drawing account. This is because capital will be decreased by paying the drawings and drawings are credited to close its account since previously it was debited.
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