Aquafena Inc. recognized taxable income of $100,000 for the year ended December 31, 2020. Aquafena calculated a deferred tax asset and a deferred tax liability of $12,000 and $8,000, respectively, on December 31, 2020. The tax rate is 25%. Assume zero beginning balances in deferred tax accounts.

a. Determine the increase in income tax payable on December 31, 2020.

Answer

b. Prepare the income tax expense journal entry on December 31, 2020.

Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.