The Cassenada Dance Company uses the accrual basis of accounting. Located in Seattle, Washington, the company’s fiscal year-end is July 31. Property taxes are paid in June and December. Total annual property taxes on the studio and parking lot are $12,000. 

Instructions

1. Record the payment made on June 30 for the first six months’ property tax in the general journal, page 22.

2. Record the adjusting entry necessary at the fiscal year-end, July 31.