Reporting Changes in Enacted Tax Rates On January 1 of Year 1, Keefe Corporation purchased equipment at a cost of $400,000. The equipment has a five-year life and no salvage value. The depreciation schedule for GAAP and tax purposes follows. Year GAAP Depreciation Tax Depreciation Year 1 $80,000 $100,000 Year 2 80,000 152,000 Year 3 80,000 148,000 Year 4 Year 5 80,000 80,000 0 0 The tax rate for Year 1 through Year 3 is 25%, but a new law is passed in Year 1 that will raise the tax rate in Year 4 and thereafter to 30%. Pretax GAAP income equals $480,000 in Year 1 and Year 2. There are no other differences between pretax GAAP income and tax income. Required a. Record the income tax journal entry on December 31 of Year 1 (assuming the original tax depreciation schedule provided). Date Dec. 31, Year 1 Account Name To record income tax expense Dr. Cr. 0 0 0 0 0 0 b. Record the income tax journal entry on December 31 of Year 2 (assuming the original tax depreciation schedule provided). Date Dec. 31, Year 2 Account Name To record income tax expense > > > Dr. Cr. ooo 0 0 0 0 0 0