ACCTG 334 Chapter 16 - Accounting for Income Taxes In-Class Tax Problem The accounting records of Price Corp show the following data for the year 2020: 1. Interest revenue on municipal bonds totaled $32,000. 2. A new insurance policy was purchased by paying $42,000 on June 30, 2020. The policy covers the company from June 30, 2020 to June 30, 2022 and the insurance expense is to be recorded equally over that time. 3. Price Corp received $75,000 in prepaid rent in 2020, of which only $20,000 was recorded as revenue, with the remaining amount recognized in 2021. 4. Pretax financial income in 2020 was $750,000. The enacted tax rate is 35% for 2020, and 30% in subsequent years. Prepare the journal entry for 2020 to record Income Tax Expense. Construct the tax section of the income statement and calculate the effective tax rate for 2020. Prepare the appropriate tax entry for 2021 related to the prepaid insurance difference