P 1612 Integrating problembonds, leases, taxes LO162, LO166, LO168 The long-term liabilities section of CPS Transportations December 31, 2020, balance sheet included the following: A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1: Table Summary: Summary Lease liability $76,061 Less: Current portion 2,394 $73,667 The incremental borrowing rate at the inception of the lease was 11% and the lessors implicit rate, which was known by CPS Transportation, was 10%. A deferred income tax liability due to a single temporary difference. The only difference between CPS Transportations taxable income and pretax accounting income is depreciation on a machine acquired on January 1, 2020, for $500,000. The machines estimated useful life is five years, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for 2021 through 2024 is as follows: Table Summary: Summary Year MACRS Depreciation Straight-line Depreciation Difference 2021 $160,000 $100,000 $60,000 2022 80,000 100,000 (20,000) 2023 70,000 100,000 (30,000) 2024 60,000 100,000 (40,000) The enacted federal income tax rates are 20% for 2020 and 25% for 2021 through 2024. CPS had a deferred tax liability of $7,500 as of December 31, 2020. For the year ended December 31, 2021, CPSs income before income taxes was $900,000. On July 1, 2021, CPS Transportation issued $800,000 of 9% bonds. The bonds mature in 20 years, and interest is payable each January 1 and July 1. The bonds were issued at a price to yield the investors 10%. CPS records interest at the effective interest rate. Required: Page 967Determine CPS Transportations income tax expense and net income for the year ended December 31, 2021. Determine CPS Transportations interest expense for the year ended December 31, 2021. Prepare the long-term liabilities section of CPS Transportations December 31, 2021, balance sheet