Norman Co., at the end of 2020, its first year of operations, prepared a reconciliation between accounting

income and taxable income as follows:

accounting income $ 1, 382,400

Estimated warranty expense 3,456,000

Installment sales gross profit (2,764,800)

Taxable income $2,073,600

The estimated warranty expense of $3,456,000 will be deductible in 2022 when it is expected to be paid.

The gross profit from the installment sales will be realized in the amount of $1,382,400 in each of the

next two years. The estimated liability for warranty is classified as current and the installment accounts

receivable are classified as half current and half noncurrent. The income tax rate is 30% for all years.

9- December 31^st, 2020, the company would make the following adjusting journal entry(s):

Debit Credit

A)	Income Tax expense	345,600
	Deferred Tax Assets	864,000
	Deferred Tax Liabilities (Noncurrent)		345,600
	Deferred Tax Liabilities (Current)		345,600
	Income Tax Payable		518,400
B)	Income Tax Expense	414,720
	Deferred Tax Assets	1,036,800
	Deferred Tax Liabilities (Noncurrent)		$414,720
	Deferred Tax Liabilities (Current)		414,720
	Income Tax Payable		622,080
C)	Income Tax expense	518,500
	Income Tax Payable		518,400
D)	None of the above