7. Arnold Industries has pretax accounting income of $128 million for the year ended December 31, 2024. The tax rate is 25%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2024. An $104 million advance rent payment at the inception of the lease is tax-deductible in 2024 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term.

Required:

Complete the following table given below and prepare the appropriate journal entry to record Arnolds income taxes for 2024.

Prepare the appropriate journal entry to record Arnolds income taxes for 2025. Pretax accounting income was $170 million for the year ended December 31, 2025.

Assume a new tax law is enacted in 2025 that causes the tax rate to change from 25% to 15% beginning in 2026. Complete the following table given below and prepare the appropriate journal entry to record Arnolds income taxes for 2025.

Complete this question by entering your answers in the tabs below. Complete the following table given below to record Arnold's income taxes for 2024. Note: Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Complete this question by entering your answers in the tabs below. Assume a new tax law is enacted in 2025 that causes the tax rate to change from 25% to 15% beginning in 2026. Complete the following table given below to record Arnold's income taxes for 2025. Note: Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Amounts to be deducted should be indicated with a minus sign