Telo Corp. is a private company that uses the taxes payable method.
The following information is available for 20X2:
1. Income before income taxes was $1,300,000.
2. The company paid a fine for late sales tax remittance in the amount of $2,000 which was expensed for accounting purposes.
3. Meals and entertainment expenses totalled $22,000.
4. Rental revenue earned and recorded for accounting totalled $60,000. One-third of this amount was reflected in rent receivable at year-end. Rental revenue is taxed in the period when the cash is collected.
5. Accrued liabilities totalled $15,000. These are recognized for tax purposes when paid.
6. Non-taxable dividends received from Canadian corporations totalled $10,000.
7. The income tax rate for 20X2 is 25% and the 20X3 enacted tax rate is 28%.
The following information is available for 20X3:
1. Income before income taxes was $1,700,000.
2. A total of $20,000 was paid for company c-suite executives for golf club memberships, which was expensed for accounting purposes.
3. The company made a political contribution in the amount of $15,000, which was expensed for accounting purposes.
4. Meals and entertainment expenses totalled $18,000.
5. Rental revenue earned and recorded for accounting totalled $50,000. Half of this amount was reflected in rent receivable at year-end. Rental revenue is taxed in the period when the cash is collected.
6. Accrued liabilities totalled $9,000 and $4,500 of this amount was paid during the year.
These are recognized for tax purposes when paid.
7. The company incurred development costs of $80,000 that were capitalized for accounting purposes. Since the project was incomplete with further costs to be incurred, no amortization was expensed during 20X3. For tax purposes, the development costs can be fully deducted when incurred.
8. Capital assets were purchased for $400,000. It was determined that straight-line depreciation would be used for accounting purposes over five years. CCA amounted to $120,000.

Required:
1. Prepare the journal entries to record income tax expense for 20X2 and 20X3. Show all supporting calculations.
2. How does the change in tax rate from 20X2 to 20X3 impact income tax expense?