Prepaid Taxes

[RLM]

We recently purchased a new building & property which is going to be remodeled for a new church facility. Part of the closing on this property included my receiving a check for up-coming property taxes. I am unclear how I need to show that. I am inclined to show it as:

01-1110-000 General Checking $xxxx.xx (debit)
01-2210-000 Property taxes payable $xxxx.xx (credit)

Is this the correct transaction, or is there a better way of showing the receipt of funds to be used for taxes that are not yet due?

[Jeff]

That is exactly right. When you go to pay the taxes you will credit the checking for the amount paid, credit the liability account for the amount received at closing. If there is any amount left over that church has to pay, you will debit an expense account for the difference.