20) Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation:

Cash 150,000

Unearned Rent Revenue 150,000

The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basic taxpayer. Kraft has an income tax payable of $230,000 at the end of 2025, and its tax rate is 25%.

What amount of income tax expense should Kraft company report at the end of 2025?

1. 211,250
2. 117,500
3. 192,500 INCORRECT
4. 267,500