During 2021, its first year of operations, Baginski Steel Corporation reported a net operating loss of $400 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests that future taxable income will be sufficient to benefit from future deductible amounts arising from the net operating loss carryforward. 2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.

Record 2021 income tax benefit from operating loss.

Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss. (Amounts to be deducted should be indicated with a minus sign.)

Income tax benefit
Operating loss before income taxes
Net loss	$0