The Tax Rate Is Not Determined Until October 10, and the Tax

question 33

Essay

The tax rate is not determined until October 10, and the tax bills are mailed October 20 with payment due by December 31. For the prior fiscal year, the Radar Company paid $18,000. The tax bill for the current fiscal year July 1, 2016-June 30, 2017) is received on October 23, and property taxes have increased to $18,900. The company pays this amount on October 29.
Required:
a. Record the monthly property tax accrual recorded in July of 2014.
b. Record the payment of the taxes on October 29.
c. Record the monthly adjusting entry on October 31.

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Definitions:

Security Agreement

A legal document that secures an interest in collateral owned by the debtor for the benefit of a creditor in the event of default.

Debtor

An individual or entity that owes money to another party, often a lender or creditor.

Perfection

In the context of secured transactions, perfection is the legal process by which a secured creditor establishes its priority interest in the debtor's collateral over other claimants.

Legal Steps

Sequential actions or procedures that are taken in accordance with law to achieve a legal outcome, such as filing a lawsuit or executing a contract.