Answered: . If a company has a pre - tax…

. If a company has a pre - tax accounting income of $1, 000, with interest revenue from municipal bonds totaling S 500, and operates under a 20% tax rate, how would you record the journal entry?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. If a company has a pre - tax accounting income of $1, 000, with interest revenue from municipal bonds totaling S
500, and operates under a 20% tax rate, how would you record the journal entry?

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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Step 1: Calculate taxable income

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Step 2: Calculate Income Tax Expense

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Step 3: Record the journal entry

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