At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $28 million attributable to a temporary book-tax difference of $70 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $75 million. Payne has no other temporary differences. Taxable income for 2021 is $200 million and the tax rate is 40%.

Payne has a valuation allowance of $12million for the deferred tax asset at the beginning of 2021.

1. Prepare the journal entry(s) to record Paynes income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized .

2. Prepare the journal entry(s) to record Paynes income taxes for 2021, assuming it is more likely than not that only two-third of the deferred tax asset ultimately will be realized.