In June 2011, Distancia Company received a bill from the county government for property taxes on its land and buildings for the period July 1, 2011, through June 30, 2012. The amount of the tax bill is $24,750, and payment is due August 1, 2011. Distancia Company uses the calendar year for financial reporting purposes.
1. Prepare the journal entries to record payment of the property taxes on August 1, 2011.
2. Prepare the adjusting entry for property taxes on December 31, 2011.