Journal entry ?
what is the journal entry for recording the yearly franchise tax fee?
For ex, after filing for franchise tax, $7,000 was due. Additionally, we didnt pay on time, so $500 penalty fee was charged. Together, we needed to pay $7,500. What is the journal entry for this? Do I need to split it up into 12 months since this is covered for a year? Do I need to record a JE monthly for this? Please help.
- EvaLv 71 month ago
Technically the entries would be a monthly entry for accrued franchise tax/franchise tax expense. Payment entry would be debit to accrued tax for $7000 and debit $500 to non-deductible expenses. Penalties and fines on tax payments are not tax deductible expenses.