On 12/31/2021, Sand Hollow Corp. records its expenses for the year and notes one (new) taxable difference going forward due to the use of different depreciation methods for GAAP and tax purposes. The asset was purchased on 1/1/2021 and has a useful life of three years. The enacted tax rates and expected depreciation expense / deductions for 2021-2023 are as follows:

	2021	2022	2023
Enacted tax rates	25%	30%	35%
GAAP depreciation expense	$40,000	$50,000	$75,000
Tax deductible depreciation (MACRS)	$60,000	$50,000	$55,000

Which of the following should be recorded on 12/31/2021?

Group of answer choices

Debit: deferred tax asset for $5,000

Debit: deferred tax asset for $6,000

Debit: deferred tax asset for $7,000

Credit: deferred tax liability for $5,000

Credit: deferred tax liability for $6,000

Credit: deferred tax liability for $7,000