Question
The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 430,000 2022 350,000 2023 420,000 2024 460,000 Included in the
The DeVille Company reported pretax accounting income on its income statement as follows:
2021 | $ | 430,000 | |
2022 | 350,000 | ||
2023 | 420,000 | ||
2024 | 460,000 | ||
Included in the income of 2021 was an installment sale of property in the amount of $62,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $24,800 in 2022, $31,000 in 2023, and $6,200 in 2024. Included in the 2023 income was $26,000 interest from investments in municipal governmental bonds. The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 20212024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
No | Date | General Journal | Debit | Credit |
---|---|---|---|---|
1 | Dec 31, 2021 | Income tax expense | 172,000 | |
Income tax payable | 147,200 | |||
Deferred tax liability | 24,800 | |||
2 | Dec 31, 2022 | Income tax expense | 140,620 | |
Deferred tax liability | 9,300 | |||
Income tax payable | 149,920 | |||
3 | Dec 31, 2023 | Income tax expense | 98,500 | |
Deferred tax liability | 7,750 | |||
Income tax payable | 106,250 | |||
4 | Dec 31, 2024 | Income tax expense | 115,000 | |
Deferred tax liability | 1,550 | |||
Income tax payable | 116,550 |
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