At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $45 million attributable to a temporary book-tax difference of $180 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $128 million. Paynehas no other temporary differences. Taxable income for 2021 is $324 million and the tax rate is 25%.Payne has a valuation allowance of $18 million for the deferred tax asset at the beginning of 2021.Required:1. Prepare the journal entry(s) to record Payne's Income taxes for 2021, assuming It is more likely than not that the deferred tax assetwill be realized in full.2. Prepare the journal entry(s) to record Payne's Income taxes for 2021, assuming It is more likely than not that only one-fourth of thedeferred tax asset ultimately will be realized.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax asset willbe realized in full. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in millions (i.e., 10,000,000 should be entered as 10).)View transaction listJournal entry worksheet12Record 2021 income taxes.Note: Enter debits before credits.Transaction1Record entryGeneral JournalClear entryDebitCreditView general journal

The temporary difference will create a Deferred tax asset. In the first case Valuation Allowance will be reversed. In second case Valuation Allowance will be created for 75% temporary difference.1. Payne Industries Journal Entries Event Particulars Debit (In Million) Credit (In Million) 1 Income tax expense Dr $94.00 To Deferred Tax Assets [($180-$128)*25%] $13.00 To Income Tax Payable ($324*25%) $81.00 2 Valuation Allowance - Deferred Tax Assets $18.00 To Income tax expense $18.00 2. Payne Industries Journal Entries Event Particulars Debit (In Million) Credit (In Million) 1 Income tax expense Dr $94.00 To Deferred Tax Assets [($180-$128)*25%] $13.00 To Income Tax Payable ($324*25%) $81.00 2 Income tax expense Dr $6.00 To Valuation Allowance - Deferred Tax Assets [($128*75%*25%) - 18] $6.00