On December 31, 2020, for GAAP purposes, Clubs Inc. reported a balance of \(\$ 70,000\) in Prepaid Maintenance Expense for services to be received over the following year. For tax purposes, however, prepaid costs are deducted immediately when paid. Pretax GAAP income is \(\$ 300,000\) and the tax rate is \(25 \%\). Assume no other temporary differences or any beginning balances in deferred tax accounts.

Required

a. Record the income tax journal entry on December 31, 2020.

b. Prepare the income tax section of the income statement for 2020 and provide the disclosure of current and deferred tax expense.