In the current year, Madison Corporation had $50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a warranty liability for financial reporting purposes of $5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes Required: Prepare the additional journal entry necessary for Madison Corporation assuming that the corporation decides that it is "more likely than not $500 of the $5,000 future deductible amount will not be realized. Madison Corporation General Ledger EQUITY 311 Common Stock 331 Retained Earnings How does grading work? The grader is designed to give you the best score possible, even when you skip lines or enter them out of order. It does this by taking every line you have entered and comparing it to every line in the answer. When it finds the line that gives you the best score, it considers that a match. Feedback Check My Work allowance to reduce its deferred tax asset(s) to the realizable amount