Computations and journal entries for income taxes with both temporary and permanent differences. Sung Company reported the following amounts for book and tax purposes for its first three years of operations:

The differences between book income and taxable income result from different depreciation methods. The income tax rate was 40 percent during all years.

a. Give the journal entry to record income tax expense for each year.

b. Assume for this part that the firm included \(\$ 10,000\) of interest on state and municipal bonds in the pretax book income amounts shown above for each year but properly excluded these amounts from the taxable income amounts shown above. Give the journal entry to record income tax expense for each year.

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Year 1 Year 2 Year 3 Pretax Book Income Taxable Income. $560,000 600,000 $500,000 450,000 $620,000 560,000