In 2016 to 2018, respectively, Bonwick Company earned taxable income of $500,000, $800,000, and $700,000, and paid income tax of $150,000, $260,000, and $200,000. It is now the end of 2019 and the company has incurred a loss of $3,500,000 for tax purposes and earns an accounting loss before tax of $3,000,000. The difference between accounting and taxable income is due to capital cost allowance exceeding depreciation expense. The tax rate is currently 30%. Bonwick anticipates using only 60% of the losses carried forward within the allowable carryforward period.

Required:

Record the journal entries for income tax expense and income tax payable or receivable for 2019. Use a valuation account for the unrecognized portion of losses carried forward.