ara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Karas buildings has a book value of $1,080,000 and a tax basis of $810,000. There were no other temporary differences and no permanent differences. Taxable income was $6 million and Karas tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $37,000 the previous year, prepare the appropriate journal entry to record income taxes this year.