October 30, 2016 admin

Prepaid Expenses—Real Estate Taxes

Assets

PREPAID EXPENSES—REAL ESTATE TAXES ASSET ACCOUNT
1570

ACCOUNT EXPLANATION
Real estate taxes paid in advance that apply to future accounting periods. In most instances, payments are made to Ford Leasing and Development Company which will, in turn, make applicable payments to tax authorities.
TRANSACTIONS
  Jrnl. Dr. Cr.
  Monthly charge by FLDC CR
    Prepaid Real Estate Taxes—Escrow 1570
      Cash in Bank—General 1001
             
  Accrual of real estate taxes SE
    Taxes—Real Estate 8400
      Accrued Taxes—Real & Personal Property 2401
COMMENTS
  • The monthly charge paid to FLDC is made on an escrow basis. When real estate taxes are paid by FLDC, the escrow account is credited and Account 2401, Accrued Real Estate Taxes, is charged.
  • The balance in Account 1570 should be reconciled to the FLDC Escrow Analysis statement at each month end.
  • Subsidiary records should support this account.