Benton County includes an independent school district and two individually chartered towns within the County. Benton County’s Treasurer assesses and collects property taxes on behalf of itself, the school district, and the towns. The County uses a tax collection custodial fund to record tax collections for the school district and towns. During the year ended December 31, 2020, the following transactions took place: 1. The County levied taxes as follows: Benton County General Fund $ 25,000,000 School District 12,500,000 Towns 2,500,000 Total $ 40,000,000
2. The property taxes levied in part (a) were collected.
3. The amounts collected were paid to the school district and towns.
Required:
a. Prepare journal entries for Benton County and the Benton County Independent School District—identify the funds.

In the Book of Benton County:

a. Debit Cash Account for $40,000,000; Credit Property Tax for $25,000,00; and Credit Tax Collection Custodial Fund for $15,000,000.

b. Debit Tax Collection custodial Fund Account for $15,000,000; Credit School District Account for $12,500,000; and Credit Towns Account for 2,500,000.

c. Debit School District Account for $12,500,000; Debit Towns Account for $2,500,000; and Credit Cash Account for $15,000,000.

In the Books of School Districts Accounts:

a. Debit Benton County Accounts for $12,500,000; and Credit Property Tax Account for $12,500,000.

b. Debit Cash Account for $12,500,000; and Credit Benton County Accounts for $12,500,000.

In the Books of Towns Accounts:

a. Debit Benton County Accounts for $2,500,000; and Credit Property Tax Account for $2,500,000.

b. Debit Cash Account for $2,500,000; and Credit Benton County Accounts for $2,500,000.

Explanation:

Note: See the attached excel for how the journal entries will look together with the explanation.

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explanation:

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