 Hello everyone, I received this questions from one of my subscribers and he asked me for an explanation for this question. So I'm going to share the explanation this way so everybody will benefit and if I'm wrong, because this is not very clear. Maybe someone can correct me. Okay. On May 1st, year one, Marno County issued property tax assessment for the physical year ended June 30th, year two. So let's look at a timeline and we are looking. This is May 1st. This is when the county issued the taxes and the year end is June 30th. So this is year end. So this is year two, physical year two. So this is F2 and F2, the physical year two. Okay. The first two equal installment was due on November 1st, year one. Simply put, the taxpayer will have to make two payments. The first one was on November 1st. The first one on November 1st and another one six months later, I would say two months before year end. Okay. So this is the second payment, which is we're not concerned about. This is one I showed you when the payment is due on September 1st. So sometime here, because we have a lot of dates here, that's why I'm changing the colors. And again, if I missed something by all means, let me know. So on September 1st here, September 1st, the company purchased a four year old factory in Marneau subject to an allowance for accrued taxes. So what we're saying is we bought a factory here, an old factory, but that factory was subject to a accrued taxes. So I'm assuming they owe taxes as of June 30th, as of the prior fiscal year. The company did not record the entire year's property tax obligation, but instead record tax expense at the end of each month by adjusting prepaid property taxes or property taxes table as appropriate. Okay. The recording of the November 1st year one payment by Dwyer should have been allocated between an increase in prepaid taxes and a decrease in prepaid taxes table in which of the following percentages. So when we paid in November, this is when we make the payment. When we paid in November, how are we going to allocate this payment? What we are told is, here's how this company works. Every month, they either adjust, so what they do is they make adjustments on a monthly basis. So at the end of each month, they do one of two things. They debit, not income, they debit, tax, what are we going to call it here? This is a real estate property tax. I'm going to call it real estate property taxes, okay, expense, and they credit real estate property taxes table. That's one way to do it, is they record the expense, but they record a liability. Or if they prepaid, what they would do is they will debit real estate property. Let me do this here. The other way that they would do it. So I want to make sure you see what we're doing here. So the other way that they do it is they will debit real estate property tax expense and they credit prepaid real estate. So in case they paid, in case they paid upfront, if they have a prepaid, they would record the expense by adjusting the prepaid, or if they don't have a prepaid, they will do so. And here what they told us, they told us, we made the payment November 1st. We made the payment November 1st. It means we don't have, so forget about this entry, okay, because we don't have this entry. We were not prepaying. So what's happening is this, when we got to November 1st, when we made our first payment, what happened is this. We made this entry, we made this entry right here. Debit real estate property tax expense for the month of July, August, August, my pen is not working, August, September and October because we made the payment November 1st. So what happened is, we made this entry four times, this entry right here. Debit and expense credit the payable for real estate. Therefore, when we make the payment, we're going to reduce because the payment is for six months. The payment is for six months. Here's what's going to happen. Four of the six months, the four six, it's going to go to reduce the payable. And two of the six, two six, which is one third, okay, one third will be prepaid for the month of November and December. This will be a prepaid because we paid it. So when we pay, let's assume we paid, let's make a number $600. So if we made a $600 payment, we're assuming $100 per month. So we're going to 400 of the 600 will be to reduce the liability. So we debit property taxes payable. So we were doing 100, 100 every month, total of 400. We're going to debit real estate property taxes payable. And what's left, the other 200, we're going to, for the 600, we're going to debit prepaid. So simply put, maybe if I, maybe I should just show you the entry. So when we make the payment, we're going to debit. Let me, let me just make this little bigger. Give me one second please. So give you the, the whole entry. Okay. So what's going to happen when we pay that, that's assuming $600. We're going to credit cash 600 of which the real estate. I'm going to real estate property. Taxes payable is debited $400 because we were accruing. And we're going to debit for the rest prepaid real estate property taxes for 200. Okay. Therefore what's going to happen is the answer is we're going to increase prepaid by 33 and one third, which is one third. And the other one is two third. And we're going to reduce this is so the payable is reduced by two third and the properties reduces by one third. Again, this is the best way I can because this is basically this question is coming from one of my subscribers. Again, this is my, this is how I understood the question. And this is the best thing I can, you know, I can share with you I'm pretty sure if somebody else has this question they have the same answer. You know, if you have any questions, any comments, please let me know. 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