Dixon Development began operations in December 2018. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2018 for lots sold this way was $15 million, which will be collected over the next three years. Scheduled collections for 20192021 are as follows:

2019	$	5	million
2020		7	million
2021		3	million
	$	15	million

Pretax accounting income for 2018 was $20 million. The enacted tax rate is 30%. Required: 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2018. 2. Suppose a new tax law, revising the tax rate from 30% to 25%, beginning in 2020, is enacted in 2019, when pretax accounting income was $17 million. No 2019 lot sales qualified for the special tax treatment. Prepare the appropriate journal entry to record income taxes in 2019. 3. If the new tax rate had not been enacted, what would have been the appropriate balance in the deferred tax liability account at the end of 2019?

View transaction list View journal entry worksheet Debit Credit General Journal No Date 6.0 1Dec 31, 2018 Income tax expense 4.5 Deferred tax liability Income tax payable 1.5