On January 1, Year 1, Santana Corp. purchased equipment for $75,000 with a five-year useful life. Santana depreciates the equipment for reporting purposes using the straight-line method. Pretax GAAP income for Year 1 is $148,000. For tax purposes, the company depreciates 100% of the equipment balance in Year 1. The companys tax rate is 25%. What is income tax expense for Year 1 and what is the balance of the deferred tax liability on December 31 of Year 1? a. Income tax expense Deferred tax liability $67,000 $15,000 b. Income tax expense Deferred tax liability $ 7,000 $ 0 c. Income tax expense Deferred tax liability $37,000 $15,000 d. Income tax expense Deferred tax liability $82,000 $60,000