Testbank Problem 117 Cullumber Company purchased equipment for $150,000 on January 2, 2020, its first day of operations. For book purposes, the equipment will be depreciated using the straight-line method over three years with no salvage value. Pretax financial income and taxable income are as follows: Pretax financial income Taxable income 2020 2021 2022 $199,000 $252,000 $292,000 186,000 252,000 305,000 The temporary difference between pretax financial income and taxable income is due to the use of accelerated depreciation for tax purposes. Your answer is partially correct. Prepare the journal entries to record income taxes for all three years (expense, deferrals, and liabilities) assuming that the enacted tax rate applicable to all three years is 35%. (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 o for the amounts.) Date Account Titles and Explanation Debit Credit 2020 Income Tax Expense 69650 x Deferred Tax Liability 4550 x Income Tax Payable 65100 2021 Income Tax Payable 88200 Deferred Tax Liability 88200 2022 Income Tax Expense 111300 Deferred Tax Liability 4550 Income Tax Payable 106750 Prepare the journal entries to record income taxes for all three years (expense, deferrals, and liabilities) assuming that the enacted tax rate as of 2020 is 35% but that in the middle of 2021, Congress raises the income tax rate to 40% retroactive to the beginning of 2021. (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 O for the amounts.) Date Account Titles and Explanation Debit Credit 2020 Income Tax Expense 69650 X Deferred Tax Liability 4550 X x Income Tax Payable 6100 X 2021 Income Tax Expense 100800 Deferred Tax Liability Income Tax Payable 100800 2022 Income Tax Expense 126550 Deferred Tax Liability 4550 Income Tax Payable 122000 Click if you would like to Show Work for this question: Open Show Work