Branch Corporation begain operations on January 1, 2020. Pretax Income for 2020 is $310,000 and $405,000 for 2021. The 2020 tax rate is 25%, but legislation passed in December 2020 that will raise the tax rate in 2021 to 30%. During 2020, Branch paid and recorded a Environment fine payment of $40,000. This fine payment is included as an expense in the 2020 pretax income, but is not tax deductible. During 2020, Branch purchased equipment for $100,000. For book purposes this equipment will be depreciated using the straight line method and depreciated over 5 years with no residual value. For tax purposes, the full $100,000 is deductible in the year of purchase. REQUIRED: 1) Compute taxable income for 2020 and 2021. 2) Record the journal entry to record income tax expense for 2020 and 2021. 3) Identify deferred tax balances at the end of 2020 and 2021. 4) Calculate the effective tax rate for 2020 and 2021.