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College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160

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BuyFindarrow_forward

College Accounting, Chapters 1-27 ...

22nd Edition
James A. Heintz + 1 other
Publisher: Cengage Learning
ISBN: 9781305666160
Chapter 21, Problem 1CE
Textbook Problem
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Ozit Company made four quarterly income tax payments of $25,000 each during the year. On December 31, Ozit’s actual income tax totals $103,000. Prepare the journal entry on December 31 to record the additional income tax owed.

To determine

Journalize the recognition of additional income tax payment for Company O.

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

  • Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
  • Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Journalize the recognition of additional income tax payment for Company O.

DateAccount Titles and ExplanationPost Ref.Debit ($)Credit ($)
December31Income Tax Expense 3,000 
   Income Tax Payable  3,000
  (Record accrued income tax expense)   

Table (1)

Description:

  • Income Tax Expense is an expense account...

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Chapter 21 Solutions

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
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