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Tru Developers, Inc sells plots of land for Industrial development Tru recognizes Income for financial reporting purposes in the year it sells the plots. For some of the plots sold this year, Tru took the position that It could recogn ze the income for tax purposes when the Installments are col ected. Income that Tru recognized for financial reporting purposes in 2018 tor pots in this category was $70 million. The company expected to Collect 60% of each Sale in 2019 and 40% in 2020. This amount overthe next two years is as*ollows: 2019 $42 million 2020 28 million $70 million Tru's pretax accounting income for 2018 was $110 million. In its Income statement, Tru reported Interest Income of $20 million, unrelated to the land sa es, for which the company's pos tion is that the interest is not taxable. Accordingly, the nterest was not reported on the tax return. There are no differences between accounting Income and taxable Income other than those described above. The enacted tax rate is 40 percent. Management believes the tax position taken on the land sales has a greater than 50% chance of being upheld based on its technical merits, but the position taken on the interest nas a less than 50% chance of being upheld. lt is further belleved that the tollowing llkelilhood percentages apply to the tax treatment of the land sales ($ In milions Anount Qualifying for In tal Iment sale $70 60 50 40 30 Percentage Likelihood of Tax Treatment Being Sustained 20% 208 20 208 20 Required: 1. What portion of the tax benefit of tax-free Interest will Tru recognize on ts 2018 tax return? 2, what portion of the tax benefit of tax-free interest will Tru recognize on its 2018 financial statements? 3-a. What portion of the tax on the $70 million Income from the plots sold on an installment basis will Tru defer on Its 2018 tax return? 3-b. What portion of the tax on the $70 million Income from the plots sold on an Installment bas's will Tru defer in Its 2018 financal statements? . Prepare the journal entry to record Income taxes in 2018 assuming full recognition of the tax benefits in the financial statements of both difterences between pretax accounting income and taxable income. 5. Prepare the journal entry to record Income taxes in 2018 assuming the recognition of the tax benefits in the financlal statements you indicated in requirements 1-3