Discussion question 1-8 (lo. 4) several years ago, ethan purchased the former parsonage of st. james church to use as a personal residence. to date, ethan has not received any ad valorem property tax bills from either the city or the county tax authorities.
a. select either "true" or "false" as reasonable explanation(s) for this oversight.
a) ethan is allowed to use the tax-exempt status for ad valorem taxes for five years after the purchase.
b) the parsonage probably was not listed on the property tax rolls, because it was owned by a tax-exempt church.
c) the parsonage remains tax-exempt, since the original use was by a tax-exempt entity.
b. what should ethan do? if ethan voluntarily notifies the tax authorities of his purchase, he be liable for any back taxes and he eliminate future interest and penalties.

The ledger of laurie rental agency on march 31 of the current year includes the following selected accounts before adjusting entries have been prepared. debit credit prepaid insurance $ 5,400 supplies $ 4,500 equipment 40,000 accumulated depreciation—equipment $12,600 notes payable 25,000 unearned rent revenue 11,100 rent revenue 90,000 interest expense –0– salaries and wages expense 20,000 an analysis of the accounts shows the following. 1. the equipment depreciates $600 per month. 2. two-thirds of the unearned rent revenue was earned during the quarter. 3. the note payable is dated january 1 and bears 12% interest. 4. supplies on hand total $800. 5. the insurance policy is a two-year policy dated january 1. instructions: a. prepare the adjusting entries at march 31, assuming that adjusting entries are made quarterly. additional accounts are: depreciation expense, insurance expense, interest payable, and supplies expense. b. compute the ending balances for prepaid insurance, unearned rent revenue, and rent revenue, and indicate in which financial statement those items will be reported.