Deferred Taxes. Assume that Firm ABC has revenues of $120,000 for both 2017 and 2018. It also has operating expenses of $40,000 for each of these years. In addition, Firm ABC accrues a loss and related liability of $10,000 for financial reporting purposes because of pending litigation. Firm ABC cannot deduct this amount for tax purposes until it pays the liability, expected in 2018. As a result, a deductible amount will occur in 2018 when Firm ABC settles the liability, causing taxable income to be lower than pretax financial information. 2017 2018 Revenues 120,000 120,000 Expenses 40,000 40,000 Litigation loss 10,000 Pretax financial income 70,000 80,000 Income tax expense (40%) 28,000 32,000 2017 120,000 40,000 Revenues Expenses Litigation loss Taxable income Income tax expense (40%) 2018 120,000 40,000 10,000 70,000 28,000 80,000 32,000 Journalize the entry at 12/31/2017 to recordincome tax expense, deferred tax asset, and income taxes payable. (15 pt) Journalize the entry at 12/31/2018 to record income tax expense, deferred tax asset, and income taxes payable. (15 pt)