Final answer:
The second closing entry typically closes revenue and expense accounts into the Income Summary account, which involves debiting revenues and crediting expenses. The correct entry depends on whether it is a net gain or loss, which is not specified in the given options.
Step-by-step explanation:
The second closing entry in the accounting cycle involves closing out expense and revenue accounts into the Income Summary account. A credit to Income Summary is used to close revenue accounts, while expenses are closed with a debit to Income Summary. Therefore, the inclusion within the second closing entry depends on whether the Income Summary balance is a net loss or a net gain during the accounting period. If the company has a net gain, the balance would be credited, and if there is a net loss, it would be debited. However, further clarification is required to determine the correct answer among the provided options as the second closing entry generally closes expense accounts, which is not mentioned in the options.
The second closing entry involves transferring the balance of the Income Summary account to the Retained Earnings account. The income summary account is used to summarize the revenue and expense accounts for the period. For the second closing entry, we need to close the income summary account with either a debit or credit.
In this case, we need to credit the Income Summary account, so the correct option is t2) Credit to Income Summary for 18,791.