Section 8.3 - The third closing entry for a business that earns a Net Income will result in a journal entry like this: Debit Income Summary, Credit Capital Debit Revenue , Credit Capital Debt Capital , Credit Income Summary Debit Capital , Credit Income Summary

The correct answer is **Debit Income Summary, Credit Capital**.<br /><br />Here's why:<br /><br />The closing process involves zeroing out the temporary accounts (revenues, expenses, and income summary) and transferring the net income or loss to the owner's capital account. Since the question specifies a Net Income, this means Revenues exceeded Expenses. The Income Summary account will have a credit balance reflecting this net income. To close the Income Summary and transfer the net income to the Capital account, we need to debit Income Summary and credit Capital.<br />