Royston Realty reported the following accounts on its income statement: Commissions Earned                                                      $54,000 Travel and Entertainment...

Royston Realty reported the following accounts on its income statement:

Commissions Earned                                                      $54,000

Travel and Entertainment                                            $4,500

Real Estate Board Fees Paid                                        5,000

Insurance Expired                                                            780

Computer Line Charge                                                   864

Advertising Expense                                                       1,460

Depreciation on Computer                                          450

Office Supplies Used                                                      940

Car Expenses                                                                     2,200

Required

1. Prepare the necessary entries to close the temporary accounts.

2. Explain why the closing entries are necessary and when they should be recorded.