Graded Assignments Deferred Taxes Q1 The following information is for Harris Inc., first year of operations. Amounts are in millions of dollars. - Accounting income for current year $60,000 - On December 31 st of the first year Harris made a rent payment to their landlord in the amount of $12,000. The payment represented 4 years advance payments of rent. - Accounting income in Year 2 was $67,000. - Interest earned from municipal bonds during the year amounted to $2,000. - The enacted tax rate for Year 1 and Year 2 was 25% and the enacted tax rate for all subsequent years is 30%. Required: 1. What is Taxable income in Year 1? 2. Prepare the Journal entry to record income tax expense for Year 1 . 3. What is the amount of net income reported on the income statement for Year 1 ? 4. What is Taxable Income in Year 2? 5. Prepare the journal entry to record income tax expense for Year 2. 6. What is the amount net income reported on the income statement for Year 2