Accrual of tax liability for an interim reporting period Assume that our company reports pretax income for the quarter of $500,000. This is typically a low profit quarter for us, and we estimate that taxable income will be $4,000,000 for the year. We also expect to be eligible for tax credits of $180,000 that will reduce our required tax payment by that amount. a. Compute the estimated effective tax rate for the year assuming a statutory federal and state combined rate of 37.5%. Round to nearest whole percent. Answer b. Prepare the required journal entry to accrue tax liability for the interim period. General Journal: Description Debit Credit Income tax expense Income tax payable