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The accounting records of Novak Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers was $9,400. 2. Equipment was acquired in early January for $275,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Novak used a 30% rate to calculate depreciation. 3. Interest revenue on State of New York bonds totaled $3,800. 4. Product warranties were estimated to be $52,500 in 2020. Actual repair and labor costs related to the warranties in 2020 were $9,700. The remainder is estimated to be paid evenly in 2021 and 2022. 5. Gross profit on an accrual basis was $96,000. For tax purposes, $72,100 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $4,200. 7. Pretax financial income was $739,000. The tax rate is 30%. Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020. Schedule of Pretax Financial Income and Taxable income for 2020 Pretax financial income 739000 Permanent differences Bond Interest Revenue Pollution Fines 4200 Insurance Expense 4 9400 Temporary differences Depreciation Expense 4 Installment Sales Warranty Expense Taxable income Prepare the journal entry for 2021 to record income taxes payable, income tax expense, and deferred income taxes. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability