Can you please help me understand this concept regarding Estimated Taxes paid in prior year? After the end of the year on January 1, I have to balance the balance sheet. As such I understand  I have to zero out the equity accounts. Otherwise the balance sheet is out of balance.

So I will do a journal entry. I will deduct or debit the equity account labeled estimated taxes. Where should I credit the same amount. Does this go in to Retain Earnings (equity account) or does it go somewhere else? 

If you can please include screenshots of the journal entry with which account to debit and credit, that would be wonderful