Update eBook Show Me How Adjusting Entries for Prepaid and Accrued Taxes Print Item A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $3,960 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 (on property) for the previous calendar year. The estimated amount of the property tax for the current year (May 1 to December 31) is $26,085. 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. If an amount box does not require an entry, leave it blank. License fees Taxes Expense 767 X Prepaid Taxes 77 X Property tax Taxes Expense 66 X Taxes Payable 17,390 X Feedback b. What is the amount of tax expense for the current year? 17,390 x Feedback eck My Work All work saved. Save and Exit Previous Next > Submit Assignment for Grading