The following information is available for Sandhill Corporation for 2019 (its first year of operations).1. Excess of tax depreciation over book depreciation, $40,400. This $40,400 difference will reverse equally over the years 2020–2023.2. Deferral, for book purposes, of $19,900 of rent received in advance. The rent will be recognized in 2020.3. Pretax financial income, $284,700.4. Tax rate for all years, 20%. ### Journal Entry for Income Tax Accounting#### Instructions:Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming a taxable income of $322,100.**Note:** Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.#### Journal Entry Table:| Account Titles and Explanation | Debit | Credit ||--------------------------------|-------|--------|| | | || | | || | | || | | || | | || | | |This table allows for recording various account details such as Income Tax Expense, Deferred Income Tax, and Income Tax Payable. You must provide the correct amounts under Debit or Credit depending on the account type and whether the amount increases or decreases the account.

Pretax financial income $284,700 Excess of tax depreciation over book depreciation -$40,400 Rent…

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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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The following information is available for Sandhill Corporation for 2019 (its first year of operations).

1.		Excess of tax depreciation over book depreciation, $40,400. This $40,400 difference will reverse equally over the years 2020–2023.
2.		Deferral, for book purposes, of $19,900 of rent received in advance. The rent will be recognized in 2020.
3.		Pretax financial income, $284,700.
4.		Tax rate for all years, 20%.

### Journal Entry for Income Tax Accounting

#### Instructions:
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming a taxable income of $322,100.

**Note:** Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.

#### Journal Entry Table:

| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |

This table allows for recording various account details such as Income Tax Expense, Deferred Income Tax, and Income Tax Payable. You must provide the correct amounts under Debit or Credit depending on the account type and whether the amount increases or decreases the account.

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