Question
The DeVille Company reported pretax accounting income on its income statement as follows: 2018 $ 390,000 2019 310,000 2020 380,000 2021 420,000 Included in the
The DeVille Company reported pretax accounting income on its income statement as follows:
2018 | $ | 390,000 | |
2019 | 310,000 | ||
2020 | 380,000 | ||
2021 | 420,000 | ||
Included in the income of 2018 was an installment sale of property in the amount of $44,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $17,600 in 2019, $22,000 in 2020, and $4,400 in 2021. Included in the 2020 income was $18,000 interest from investments in municipal bonds. The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 20182021.
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