On December 31, 2020, Bengal Company had pretax financial income of $800,000. In addition, Bengal's accountant determined the following differences between pretax financial income and taxable income:

1. Interest income from state municipal bonds of $20,000.

2. An accrual for litigation expense of $70,000 that will most likely be paid out in 2024.

3. Excess tax depreciation over book depreciation of $480,000. The difference will reverse equally over a four-year period 2021-2024.

4. Unearned rent revenue deferred for financial income purposes but received in cash of $60,000. The rent revenue will be recognized for financial income purposes in 2021.

The enacted tax rate is 20% for all years.

Required:

1. Calculate taxable income for 2020.

2. Prepare the journal entry required to recognize all taxes (current and deferred) at December 31, 2020.

3. Assuming taxable income of $650,000 in 2021, prepare the necessary journal entry to recognize all taxes (current and deferred) in 2021.