Question
Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation: (debit)Cash: 150,000 (credit)Unearned Rent Revenue:
Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation:
(debit)Cash: 150,000
(credit)Unearned Rent Revenue: 15,000
The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft's tax rate is 25%. Assuming that income taxes payable at the end of 2026 is $255,000, what amount of income tax expense would Kraft record for 2026? If the answer is "$273,750" how is arrived to that?
Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation:
(debit)Cash: 150,000
(credit)Unearned Rent Revenue: 15,000
The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft's tax rate is 25%. Assuming that income taxes payable at the end of 2026 is $255,000, what amount of income tax expense would Kraft record for 2026? If the answer is "$273,750" how is arrived to that?
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Foundations Of Business
Authors: William M. Pride, Robert J. Hughes, Jack R. Kapoor
7th Edition
0357717945, 978-0357717943
