Answer:
Dr Seller $1,254.25
Cr Buyer $1,254.25
Explanation:
Calculation for how will the proration of property taxes show on the closing statement
First step is to calculate days of seller ownership
Days of seller ownership= 31 days in January 31 + 28 days in February+31 days in March + 19 days in April
Days of seller ownership=109 days
Second step is to calculate the tax owed by the seller using this formula
Tax owed by the seller =[(Property taxes ÷365 days)*Days of seller ownership]
Let plug in the formula
Tax owed by the seller=[($4,200 per year÷365 days)*109 days
Tax owed by the seller=$1,254.25
Last step is how will the proration of property taxes show on on the closing statement
Closing statement Entries will be show as:
Dr Seller $1,254.25
Cr Buyer $1,254.25
Therefore how will the proration of property taxes show on the closing statement is Debit Seller $1,254.25 and Credit Buyer $1,254.25
