Novotna Inc.$$s only temporary difference at the beginning and end of $2024$ is caused by a $$3$ million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable $($only one$-$half of which is classified as a current asset$)$ is due in equal installments in $2025$ and $2026.$ The related deferred tax liability at the beginning of the year is $$900,000.$ In the third quarter of $2024,$ a new tax rate of $20\%$ is enacted into law and is scheduled to become effective for $2026.$ Taxable income for $2024$ is $$5,000,000,$ and taxable income is expected in all future years.

Instructions:

Determine the amount reported as a deferred tax liability at the end of $2024.$ Indicate proper classification$($s$).$

Prepare the journal entry $($if any$)$ necessary to adjust the deferred tax liability when the new tax rate is enacted into law.

Draft the income tax expense portion of the income statement for $2024.$ Begin with the line $$Income before income taxes.$$ Assume no permanent differences exist.