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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.
-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.

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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.
-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.

Quizplus · Accepted Answer

The company would have recorded an adjusting entry at the end of April to recognize one month's worth of property tax expense ($7,000) and a liability for the unpaid portion ($14,000). On May 1, the payment would clear the liability and prepaid amounts.

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