Company A reports pretax financial income of $100,000 for 2019. The following items caused taxable income to be different than pretax financial income.

1. $5,000 of life insurance carried by the company on key officers.
2. Estimated warranty liability is $20,000 for accounting purposes and $0 for tax purposes.
3. Depreciation for tax purposes exceeds depreciation for accounting purposes by $25,000.

Company A's tax rate is 25% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2019.

Instructions:

1. Compute taxable income and income taxes payable for 2019.

2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.