In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $460,000 at December 31, 2024. DFS had no temporary differences at the beginning of the year. Required: Assuming an income tax rate of 25% and 2024 income tax payable of $910,000, prepare the journal entry to record income taxes for 2024.
In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $460,000 at December 31, 2024. DFS had no temporary differences at the beginning of the year. Required: Assuming an income tax rate of 25% and 2024 income tax payable of $910,000, prepare the journal entry to record income taxes for 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when
collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period
tenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $460,000 at December 31, 2024.
DFS had no temporary differences at the beginning of the year.
Required:
Assuming an income tax rate of 25% and 2024 income tax payable of $910,000, prepare the journal entry to record income taxes for
2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Answer is not complete.
No
Transaction
General Journal
1
1
Income tax expense
Income tax payable
Deferred tax liability
Debit
1,025,000
Credit
910,000
115,000
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