Brief Exercise 16-10 (Algo) Calculate taxable income (L016-2, 16-5] Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $640,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $740,000, which includes interest revenue of $17,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%. Prepare the journal entry to record income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the income tax expense. Note: Enter debits before credits. Transaction General Journal Debit Credit Income tax expense Deferred tax liability Income tax payable Record entry Clear entry View general journal