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Angel Eyes Corporation operates on a calendar year basis.The company is in its first year of operations and received its annual property tax bill on March 31 for $21,000.The bill is due May 1.Even though the company records adjusting entries on a monthly basis, no entries related to property taxes have been recorded.
-The March 31 entry to record property tax should be
A)debit property tax expense $5,250 and credit property tax payable $5,250.
B)debit property tax expense $21,000 and credit property tax payable $21,000.
C)debits to prepaid property tax and property tax expense for $15,750 and $5,250, respectively and credits to property tax payable and cash for $15,750 and $5,250, respectively.
D)debits to prepaid property tax and property tax expense for $15,750 and $5,250, respectively and credit to property tax payable for $21,000.

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Use the following information to answer questions 
Angel Eyes Corporation operates on a calendar year basis.The company is in its first year of operations and received its annual property tax bill on March 31 for $21,000.The bill is due May 1.Even though the company records adjusting entries on a monthly basis, no entries related to property taxes have been recorded.
-The March 31 entry to record property tax should be
A)debit property tax expense $5,250 and credit property tax payable $5,250.
B)debit property tax expense $21,000 and credit property tax payable $21,000.
C)debits to prepaid property tax and property tax expense for $15,750 and $5,250, respectively and credits to property tax payable and cash for $15,750 and $5,250, respectively.
D)debits to prepaid property tax and property tax expense for $15,750 and $5,250, respectively and credit to property tax payable for $21,000.

Quizplus · Accepted Answer

The property tax expense for the first quarter is $5,250 ($21,000 x 3/12). The entry to record the property tax expense and payable would be a debit to property tax expense for $5,250 and a credit to property tax payable for $5,250.

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