Asked by
Fahim Asfak
on Dec 16, 2024
Verified
Assuming appropriate adjusting entries were completed for the April month end, what entry should be recorded for the payment on May 1?
A) debit prepaid property tax $21,000 and credit cash $21,000
B) debits to prepaid property tax and property tax expense for $14,000 and $7,000, respectively and credit to cash for $21,000
C) debits to prepaid property tax and property tax payable for $14,000 and $7,000, respectively and credit to cash $21,000
D) debit property tax payable $15,750 and credit to cash $15,750.
Prepaid Property Tax
An expense recorded when property taxes are paid in advance before they are due, treated as an asset on the balance sheet.
Property Tax Expense
An expense recorded to reflect the cost of property taxes levied by local governments, often related to real estate owned.
Property Tax Payable
The amount of property tax that a company or individual owes to a local government but has not yet paid.
- Comprehend the process of preparing and adjusting entries related to property tax transactions.
Verified Answer
SR
Learning Objectives
- Comprehend the process of preparing and adjusting entries related to property tax transactions.