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Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward,
Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (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 for the amounts.) Debit Credit Date Account Titles and Explanation 2018 Income Tax Expense 24600 24600 Income Tax Payable 19600 2019 Income Tax Expense 19600 Income Tax Payable 2020 44200 Deferred Tax Asset Benefit Due to Loss Carryforward (To record income taxes.) Benefit Due to Loss Carryforward 44200 Allowance to Reduce Deferred Tax Asset to Expected Realiz (To record allowance.) 2021 Income Tax Expense 27500 Income Tax Payable Deferred Tax Asset (To record income taxes.) Allowance to Reduce Deferred Tax Asset to Expected Realiz Benefit Due to Loss Carryback (To adjust allowance.) Novak Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $123,000 20 % 2019 98,000 20 % 2020 (105,000) 25 % 2021 110,000 25 % The tax rates listed were all enacted by the beginning of 2018
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