At the beginning of 2015; Elephant, Inc. had a deferred tax asset of $4,000 and a deferred tax liability of $6,000. Pre-tax accounting income for 2015 was $300,000 and the enacted tax rate is 40%. The following items are included in Elephants pre-tax income:

Interest income from government obligations	$24,000
Accrued warranty costs, estimated to be paid in 2016	$52,000
Operating loss carryforward	$38,000
Installment sales revenue, will be collected in 2016	$26,000
Prepaid rent expense, will be used in 2016	$12,000

87. Which of the following is required to adjust Elephant, Inc.s deferred tax asset to its correct balance at December 31, 2015?

a. A debit of $20,800

b. A credit of $15,200

c. A debit of $15,200

d. A debit of $16,800

88. The ending balance in Elephant, Incs deferred tax liability at December 31, 2015 is

a. $9,200

b. $15,200

c. $10,400

d. $31,200