Pierce Corp. has a December 31 year end. It received its property tax invoice of
ID: 2571160 • Letter: P
Question
Pierce Corp. has a December 31 year end. It received its property tax invoice of $37,800 for the calendar year on April 30. The invoice is payable on July 15. Prepare the journal entries to record the property tax on (a) April 30, (b) July 15, and (c) December 31, assuming the company adjusts its accounts annually. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)
Date Account Titles and Explanation Debit Credit July 15Explanation / Answer
Date Accounts and Explanation Debit Credit 30-Apr Property tax Expense (37800/12*4) 12600 Property tax payable 12600 ( To record the property tax expense for the quarter) 15-Jul Property tax payable 12600 property tax expense(37800/12*2.5) 7875 Prepaid property tax ( 37800/12*5.5) 17325 Cash 37800 ( To record the payment of property tax) 31-Dec property tax expense 17325 Prepaid property tax ( 37800/12*5.5) 17325 ( to record the recognition of the property tax expense)