Prepaid insurance 504 Cash 504 What nominal account could be

Prepaid insurance 504 Cash $504 What nominal account could be debited instead of Prepaid insurance and then what would be the adjusting entry? z. Little Red adjusts and closes its accounts each December 31\", year D. Property taxes for the city fiscal year ends on June 30,E, have not been recorded or paid. A tax statement was received near the end of December 19D for $6,000. The taxes are due, and will be paid, on February 15, yearE Property tax expense for the city fiscal year ended June 30,D, was $4,800. No property tax expense has been recorded in D. Hint: Notice that the city and the company have different fiscal years

Solution

2)

As the fiscal year of the company ends at June 30 D and Properly tax expense for period is $4800, which is payable in Feb 15 E. No Property tax expense has been recorded, so Entry to be recorded at year end ie. June 30 D is :

Debit Property tax expense $4800

Credit property Tax payable $4800

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The Entry on Feb 15 E will be :

Debit property Tax payable $4800

Credit Cash $4800

(Being the property tax payable on June 30 D, now paid)

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