Issuance of tax anticipation

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On July 1, the first day of its fiscal year, the Ovid City levied a $1,000,000 property tax which is payable in full on December 1 of the same year. On September 15, the City decided to borrow $200,000 in 90 day tax anticipation notes to cover operating expenditures until the tax revenues are collected. The journal entry on September 15 to record the issuance of tax anticipation notes will include:

A) A credit to Proceeds of Tax Anticipation Notes.

B) A credit to Tax Anticipation Notes Payable.

C) A credit to Tax Anticipation Revenue.

D) Either B or C is acceptable if consistently applied.

Reference no: EM13131478

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