Deferred Accounting: January 1, 20X1, Taxcor collected $200,000 for a four year contract to provide lawn care maintenance service which was recorded as unearned maintenance service revenues. Under GAAP, the service revenues are recognized when earned, which will be as $50,000 for each of the four years, 20X1 through 20X4. Under the IRS (tax code), Taxcor will declare the entire fees ($200,000) as maintenance service revenues in 20X1. Taxcor reported net income before taxes (GAAP or pre-tax accounting income) of $5,000,000 in 20X1. Assume a tax rate of twenty percent for 20X1 through 20X4. REQUIRED: During 20X2, legislation was passed to increase the tax rate to 22%, effective for years 20X3 and beyond. Prepare journal entries and calculate net income for 20X2, assuming that taxable income is $3,500,000