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Andular Financial Services was organized on April 1 of the current year. On April 2, Andular prepaid $9,000 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. Andular 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 (April 1 to December 31) is $34,500.
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.
b. What is the amount of tax expense for the current year?
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