E18-11

For the year ended December 31, 2019, Nelson Co.s income statement showed an income of $435,000 before income tax expenses. To compute the taxable income, the following differences were noted:

Income from tax-exempt municipal bonds $60,000

Depreciation deducted for tax purposes in

excess of depreciation recorded on the books $120,000

Proceeds received from life insurance on death

of an insured employee $100,000

Corporate tax rate for 2019 30%

Enacted tax rate for future periods 35%

Required:

Prepare Nelsons income tax journal entry at the end of 2019