Adjusting Entries for Prepaid and Accrued Taxes A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $3,240 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. A-Z Construction is also required to pay in January an annual tax con property) for the previous calendar year. The estimated amount of the property tax for the current year (May 1 to December 31) is $21,460. a. Journalize the two adjusting entries required to bring the accounts affected by the two taxes up to date as of December 31, the end of the current year. 21,460 License fees Taxes Expense V Prepaid Taxes Property tax Taxes Expense r Taxes Payable Feedback Check My Work Determine the amount of prepaid city loense that will expire each month. Then expense the expired amount that will occur from April 2 to December 31 Complete your adjusting entry by making sure that it affects at least one income statement account and one balance sheet account The property tax requires increasing an expense account Complete your adjusting entry by making sure that it affects at least one income statement account and one balance sheet account. Leaming Objective 2 and Learning Objective 3. b. What is the amount of tax expense for the current year? $ 21,460 x Checkwork