In 2020, its 1st year of operations, ABC Inc. has a net operating loss of ($220,000). Assume ABC management thinks that, at the end of 2020, that it is unlikely that the loss carryforwards will be realized in the future. Then in 2021, ABC has $120,000 in taxable income. Now management believes ABC will continue to be profitable in the future. Assume income tax rates of 25% in 2021 and 20% in 2020 respectively.

Prepare the required entries based on the above information.