Sand engaged in operations at the start of $201$ and reported $$550,000$ in pre$-$tax book income for the year. Tax depreciation for Sand exceeded book depreciation by $$50,000.$ The tax rate for $201$ was $25\%,$ and Congress had enacted a tax rate of $21\%$ for the years after $201.$

The journal entry to record the taxes for Sand Company at December $31,20$X$1$ would be:

Multiple Choice

DR Income tax expense $125,000$ CR Cash $125,000$

DR Income tax expense $135,500$ CR Deferred tax liability $10,500$ CR Income tax payable $125,000.$

DR Income tax expense $135,500$ CR Cash $135,500$

DR Income tax expense $146,000$ CR Deferred tax liability $10,500$ CR Income tax payable $135,500$