Headland Company reports pretax financial income of $66,100 for 2020. The following items cause taxable income to be different than pretax financial income. Depreciation on the tax return is greater than depreciation on the income statement by $14,800. 1. 2 3. Rent collected on the tax retum is greater than rent recognized on the income statement by $23,900. Fines for pollution appear as an expense of $10,600 on the income statement. Headland's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Your Answer Correct Answer Your answer is correct. Compute taxable income and income taxes payable for 2020. Taxable income Income taxes payable. 85,800 25,740 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Tax Payable Debit 23,010 7,170 Credit 4,440 25,740 Prepare the income tax expense section of the income statement for 2020, beginning with the lipe "Income before income taxes." (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Headland Company Income Statement (Partial) $