Chapter 9, Problem 20QS

To determine

Journal Entries:

Journal is the book for recording financial transactions in chronological order. It is the first step of accounting. In this process each transaction has two sides- debit side and credit side. Total of debit side must be equal to total of credit side.

Accounting rules for journal entries:

• To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
• To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Deferred Tax Liabilities:

Deferred tax liabilities are the liabilities which arises because of temporary differences between financial and tax accounting or because of difference between taxes paid and taxes due for future. It is shown in balance sheet.

To prepare: Adjusting entry for income tax expense.