The following information is available for Blossom Corporation for $2025.$

Depreciation reported on the tax return exceeded depreciation reported on the income statement by $$130,000.$ This difference will reverse in equal amounts of $$32,500$ over the years $2026-2029.$

Interest received on municipal bonds was $$11,000.$

Rent collected in advance on January $1,2025,$ totaled $$59,400$ for a $3-$year period. Of this amount, $$39,600$ was reported as unearned at December $31,2025,$ for book purposes.

The tax rates are $20\%$ for $2025$ and $17\%$ for $2026$ and subsequent years.

Income taxes of $$149,000$ are due per the tax return for $2025.$

No deferred taxes existed at the beginning of $2025.$

$($a$)$

Your answer is correct.

Compute taxable income for $2025.$

Taxable income for $2025$ $

Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for $2025$ and $2026.$ Assume taxable income was $$357,000$ in $2026.($List all debit entries before credit entries. 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 $0$ for the amounts. Record journal entries in the order presented in the problem.$)$

Date Account Titles and Explanation

Debit

Credit

$2025$

Income Tax Expense

Deferred Tax Asset

Deferred Tax Liability

Income Tax Payable

$2026$

Income Tax Expense

Deferred Tax Liability

Deferred Tax Asset

Income Tax Payable