Please make the response detailed and easy to read, thank you Recording Income Tax Expense...
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Recording Income Tax Expense
On December 31, 2020, Delta Inc. recorded $28,000 of deferred revenue (a liability) on customer deposits received in advance of the satisfaction of performance obligations. However, this amount is taxable in 2020 when cash was received. Assume a tax rate of 25% and pretax GAAP income of $160,000 for 2020.
Record the income tax journal entry on December 31, 2020. Assume zero beginning balances in deferred tax accounts and there are no other differences between accounting and tax incomes.
Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry.
Dr. Cr. . Date Account Name Dec. 31, 2020 Deferred Tax Asset 0 x o > 0 x 0 Income Tax Expense Income Tax Payable 0 0 X N/A 0 0
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