The City of Jonesboro allows discounts on taxes. Specifically, taxpayers get a 1% discount on the total tax if it is paid within one month of the initial levy
What would the journal entry be to record the levy of $700,000 if the government anticipates there will be a 2% uncollectible rate and it is anticipated that the discounts will be $5,000?
Debit Credit
A. Taxes Receivable
Allowance for Uncollectible Taxes
Allowance for Discounts
Revenues $700,000
$14,000
5,000
681,000
B. Taxes Receivable
Revenues $700,000 $700,000
C. Taxes Receivable
Expenditures
Allowance for Uncollectible Taxes
Revenues $695,000
5,000
$14,000
686,000
D. Taxes Receivable
Allowance for Uncollectible Taxes
Revenues $700,000
$14,000
686,000
A
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