1. If a company earns $48,000 income on a municipal bond and the tax rate is 20%,

1. Income tax expense would exceed income taxes to pay by 48,000 x .20
2. Income tax expense would be less than income taxes to pay by 48,000 x .20
3. The current portion of income taxes would exceed income tax expense by $48,000.
4. Income tax expense would equal income taxes to pay.