During 2020, Martinez Co.s first year of operations, the company reports pretax financial income at $236,700. Martinezs enacted tax rate is 45% for 2020 and 20% for all later years. Martinez expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows.

		Future Years
		2021			2022			2023		2024		2025		Total
Future taxable (deductible) amounts:
Installment sales		$30,900			$30,900			$30,900						$92,700
Depreciation		6,100			6,100			6,100		$6,100		$6,100		30,500
Unearned rent		(52,900)			(52,900)									(105,800)

1. Compute taxable income for 2020.

2. Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for 2020