Camden Inc. (a property and casualty insurance company) reported taxable income of $250,000 for 2019 and $300,000 for 2020. Tax rate for both years was 30%. However, for 2021, Camden Inc. reported pre-tax accounting loss of $1,000,000 for financial reporting purposes. The pre-tax accounting loss for 2021 included an estimated loss of $300,000 from having accrued a loss contingency. The loss will be paid in 2022 at which time it will be tax deductible. The company decided to carry back its 2021 net operating loss. In 2022 the company developed and introduced a new product that proved to be in high demand. For 2022 the company reported pre-tax accounting income of $1,000,000. Assume that the tax rates are 35% for 2021 and 40% for 2022 and all future years.

REQUIRED:

1. Prepare the income tax journal entries for Camden Inc. at the end of 2021, assuming that at the end of 2021 the company believes that it is more likely than not that 30% of deferred tax asset will not be realized. (Show supporting schedules and calculation).