Several years ago, Marathon Oil Corp. purchased equipment for $16,500,000. Marathon Oil uses straight-line depreciation for financial reporting and accelerated depreciation for tax purposes. At December 31, 2020, the carrying value of the equipment was $14,850,000 and its tax basis was $12,375,000. At December 31, 2021, the carrying value of the equipment was $13,200,000 and the tax basis was $9,075,000. There were no other temporary differences and no permanent differences. Pretax accounting income for the current year was $21,500,000. A tax rate of 25% applies to all years. Required: Prepare the journal entry to record Marathon Oil's income tax expense for the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Several years ago, Marathon Oil Corp. purchased equipment for $16,500,000. Marathon Oil uses straight-line
Required:
Prepare the
Step by step
Solved in 3 steps with 1 images
