Question
Lin Corporation began operations in January 2023 and purchased a machine for $23,000. Lin uses straight-line depreciation over a four-year period for financial reporting purposes.
Lin Corporation began operations in January 2023 and purchased a machine for $23,000. Lin uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2023, 30% in 2024, and 20% in 2025. Pretax accounting income for 2023 was $153,000, which includes interest revenue of $21,500 from municipal bonds. The enacted tax rate is 30% for all years. There are no other differences between accounting and taxable income.
Required:
Prepare a journal entry to record income taxes for the year 2023. As a reminder, show all your calculations.
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