Arnold Industries has pretax accounting income of $40 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2018. The company made an $20 million advance rent payment at the inception of the lease that will cover the lessee's use of the leased asset for the next four years.

Journal entry worksheet Record 2018 income taxes. Note: Enter debits before credits. Event General Journal Debit Credit Journal entry worksheet Record 2019 income taxes. Note: Enter debits before credits. Event General Journal Debit Credit