In 2020, its first year of operations, Rho Inc., a Canadian public company, reported a $ 500,000 loss for tax purposes. At the end of 2020, because it is a new company, Rhos management thought that it was probable that the loss carryforward would not be realized in the near future and no journal entry was made to recognize the loss carryforward. However, in 2021, Rho reported $ 300,000 taxable income. The tax rate is 25% and is likely to remain at this rate for the foreseeable future. By the end of 2021, management feels it is now probable that there will be future taxable incomes against which the 2020 loss could be applied.

Instructions: Prepare the entries (if any) in 2021 to record current and deferred taxes and to recognize the loss carryforward.