Rosa's pretax accounting income in Year 2 is $3,000. Rosa deducts depreciation for tax purposes in excess of accounting depreciation of $300 in Year 1 and $700 in Year 2. It is expected the depreciation deduction will reverse by $500 in Year 3 and $500 in Year 4. The income tax rate is 40%. Which of the following entries is included in the journal entry to record deferred taxes for Year 2?

Multiple choice question.

Credit deferred tax liability $500.

Debit income tax expense $400.

Debit deferred tax expense $400.

Credit deferred tax liability $280.