Novak Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,709,000 for the year ended December 31, 2020. During 2020, Novak paid $205,000 for meals and entertainment expenses. In 2017, Novaks tax accountant made a mistake when preparing the companys income tax return. In 2020, Novak paid $16,000 in penalties related to this error. These penalties were not deductible for tax purposes. Novak owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Novak rented the building to SPK Inc. for two years at $254,000 per year. SPK paid the entire two years rent in advance. Novak used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $398,000. For tax purposes, Novak claimed the maximum capital cost allowance of $623,000. Novak began to sell its products with a two-year warranty against manufacturing defects in 2020 to match a warranty introduced by its main competitor. In 2020, Novak accrued $589,000 of warranty expenses: actual expenditures for 2020 were $284,000 with the remaining $305,000 anticipated in 2021. In 2020, Novak was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be decreased to 33% for all future years beginning January 1, 2021. Prepare the journal entries to record current and future income taxes for 2020.

required: to record current tax expense and future tax expense

Prepare the journal entries to record current and future income taxes for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Current Tax Expense 845425 Income Tax Payable 845425 (To record current tax expense.) Deferred Tax Expense 100650 Deferred Tax Liability 100650 (To record future tax expense.)