For the year ended December 31, 2020 Michael Company’s income statement showed income of $1,035,000 before income tax expense. To compute taxable income, the following differences were noted:

Management compensation paid
Parking fines paid for the authorized vehichles of the company Income From Tax exempt municipal bonds
Corporate Tax rate for 2020
Enacted Tax rate for future periods

$ 65,000 $ 35,000 $ 35,000

30% 40%

Required
1. Calculate taxable income and tax payable in 2020 for Michael Company.
2. Prepare Michael Company’s income tax journal entry at the end of 2020.