Explanation:
a. The journal entries are as follows
Taxes Expense A/c Dr $12,320
To Prepaid Taxes A/c $12,320
(Being the tax expense is recorded)
The computation is shown below:
= $18,480 × 8 months ÷ 12 months
= $12,320
Taxes Expense A/c Dr $45,000
To Property Taxes Payable A/c $45,000
(Being the taxes expense is recorded
b. The amount of tax expense for the current year is shown below:
= $12,320 + $45,000
= $57320
