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Arndt, Inc., reported the following for 2018 and 2019 ($ in millions):

20182019Revenues$893$992Expenses764804Pretax accounting income (income statement)$129$188Taxable income (tax return)$130$200Tax rate: 40%

1. Expenses each year include $20 million from a two-year casualty insurance policy purchased in 2018 for $40 million. The cost is tax deductible in 2018.
2. Expenses include $2 million insurance premiums each year for life insurance on key executives.
3. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2018 and 2019 were $26 million and $31 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $18 million ($7 million collected in 2017 but not recognized as revenue until 2018) and $26 million, respectively. Hint: View this as two temporary differencesone reversing in 2018; one originating in 2018.
4. 2018 expenses included a $15 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold in 2019.
5. During 2017, accounting income included an estimated loss of $4 million from having accrued a loss contingency. The loss was paid in 2018 at which time it is tax deductible.
6. At January 1, 2018, Arndt had a deferred tax asset of $4 million and no deferred tax liability.

6.Suppose that during 2019, tax legislation was passed that will lower Arndt's effective tax rate to 35% beginning in 2020. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2019.