Solving Prorations Step by Step

Every proration is four moves. (1) Find the ANNUAL amount (taxes $3,600). (2) Get the daily rate — statutory method: $3,600 ÷ 360 = $10/day (30-day months); actual method: ÷ 365. (3) Count the days the SELLER owned (statutory: full months × 30 + odd days; closing June 15, seller owns Jan 1–Jun 15 = 5×30+15 = 165 days). (4) Assign: taxes paid in ARREARS → seller owes their share: DEBIT seller, CREDIT buyer $1,650. If the item was PREPAID, flip it: credit seller, debit buyer for the unused remainder. Always answer the question asked — 'the buyer's credit' and 'the seller's debit' are the same number wearing different hats.