Colombo Company included in 2020 a deferred income on installment sale of P500,000 in accounting income.

This deferred income is expected to reverse for tax purposes in 2021.

Accounting income:

2020 - 5,500,000

2021 - 7,000,000

Taxable Income:

2020 - 5,000,000

2021 - 7,500,000

Income tax rate:

2020 - 30%

2021 - 30%

Required:

1. Prepare journal entries to record the income tax and deferred tax for 2020 and 2021.

2. Present the income tax expense in the income statement for 2020 and 2021.