A new tax law is enacted in 2022, increasing the tax rate from 21% in 2022 to 24% in 2023 and 25% in 2024 and thereafter.

In 2021, Genius Company reports $110,000 of income before taxes. Genius computes its taxable income after considering the following issues: 1. In 2021, Genius collected $120,000 from a business that is renting a portion of its warehouse. The $120,000 covers the rental payment for the three years 2022-2024, and therefore no rental revenue has been recognized for 2021. However, Genius must pay taxes on the entire amount collected in 2021. 2. Genius added heaters to its product sales in 2021 and decided to offer a product warranty. Having obtained information from local companies selling similar products, Genius estimates that costs associated with the 2-year warranty will be about $35,000. In 2021, Genius incurs $12,000 of costs for warranty claims. 3. An accelerated depreciation method is used for tax purposes. In 2021, Genius reports $20,000 more depreciation expense for tax purposes than it shows in the accounting records. The excess depreciation is expected to reverse in 2024. The enacted tax rate in 2021 is 21%. Assume that Genius' pretax accounting income in 2023 is $92,000. There is no difference between Genius' reported accounting and tax depreciation expense in 2023. Genius sells more heaters in 2023 with estimated warranty costs of $45,000. Actual warranty costs incurred in 2023 are $35,000. Genius' investment in tax-free municipal bonds earns only $19,000. f. Prepare the journal entry necessary to record income taxes at the end of 2023