Bright Ltd started a transportation business in 2018. On 1 January 2019, Bright Ltd purchased Vehicle X for $50,000 cash. Bright Ltd depreciates all items of Property, Plant & Equipment using a straight-line method. Vehicle X is estimated to be used in the delivery operation for 5 years with zero residual value. The depreciation rate allows by the tax authority is 25% per annum. Due to some issues arising, Vehicle X was sold to Tree Ltd for $30,000 on 30 June 2021.

Bright Ltd prepares its financial statement on 30 June each year. The company tax rate is 30%.

Prepare journal entries to account for income tax in relation to Vehicle X on 30 June 2021 in accordance to IAS 12/ AASB 112 Income Taxes. Show ALL workings.

Solution Question 4- Bright Ltd:

Dr	Income tax expense	750
Cr	Deferred tax liability		750
	(tax effect on vehicle; 1,875 -1,125)

Dr	Deferred tax liability	1,875
Cr	Income tax expense		1,875
	(close deferred tax account for vehicle)

I don't understand this solution. Why is it tax liability instead of tax asset? and why there are two journey entries?