BlubBlub Co. experienced the following timeline of taxable income before the effects of net operating loss carrybacks and carryforwards.

Year	Taxable income before the effects of net operating loss carrybacks and carryforwards
2017	$160
2018	-$200
2019	$80

Under the U.S. Tax Cuts and Jobs Act of 2017 (“TCJA”), net operating losses cannot be carried backward, but can be carried forward indefinitely. Net operating loss carryforwards can be used to reduce taxable income by up to 80% of taxable income in any year. The federal corporate income tax rate is 21%.

At the end of 2019, BlubBlub Co. recognized that it is more likely than not that the company will not be able to use its remaining net operating loss carryforwards. As a result, the company recorded a valuation allowance to its deferred tax asset for the net operating loss carryforwards. The company would record which of the following journal entries?

Credit tax expense and debit deferred tax liabilities

Debit tax expense and credit valuation allowance for deferred tax assets.

Debit tax expense and credit deferred tax liabilities.

Credit tax expense and debit valuation allowance for deferred tax assets

2-

WikWok hires a consultant for a new project, and issues common stock with a par value of $100 in exchange for consulting services received. The common stock does not have an observable fair value. The consultant ordinarily charges $3600 for the services received. What is the journal entry required to record this transaction?

Dr. Cash -- 4200

Cr. Additional paid-in capital -- 4100

Cr. Additional paid-in capital -- 3500

Dr. Consulting fee expense -- 4200

Dr. Consulting fee expense -- 3600

Cr. Common stock at par -- 100