Use the Following Information to Answer Questions

question 65

Multiple Choice

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.

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Definitions:

Tangibles

Physical items or properties that can be seen, touched, or measured.

Logrolling

Logrolling involves the exchange of favors, especially in politics, by reciprocal voting for each other's proposed legislation.

Highly Preferred Outcome

A result or conclusion that is significantly favored or desired over other possible outcomes.

Integrative Agreements

Negotiation outcomes that involve creative solutions allowing all parties to achieve their objectives, often leading to mutual benefits.