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Cross Corporation provided the following reconciliation between taxable income and pretax GAAP income. Year 1 Year 2 Year 3 Year 4 Taxable income $ 4

Cross Corporation provided the following reconciliation between taxable income and pretax GAAP income.
Year 1 Year 2 Year 3 Year 4
Taxable income $416,500 $556,500 $590,800 $522,200
Interest revenue on tax-exempt municipal bonds 3,5003,5004,2002,800
Depreciation expense 105,000(35,000)(35,000)(35,000)
Bad debt expense (140,000)(70,000)(126,000)175,000
Pretax GAAP income $385,000 $455,000 $434,000 $665,000
Depreciation adjustment results from a difference between the GAAP basis and tax basis of depreciable equipment.
Bad debt expense adjustment results from a difference between the GAAP basis and tax basis of net accounts receivable.
Deferred tax accounts have a zero balance at the start of Year 1. Tax rate is 25%.
Required
Journal Entries
Financial Statement Presentation
a. Record the income tax journal entry on December 31 of Year 1.
b. Record the income tax journal entry on December 31 of Year 2.
c. Record the income tax journal entry on December 31 of Year 3.
d. Record the income tax journal entry on December 31 of Year 4.
Note: If a line in a journal entry isn't required for the transaction, in the last line of the journal entry, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero).

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