The following information is available for the first four years of operations for a Company:

i. Year Taxable Income Tax Rate

2017 $500,000 40%

2018 375,000 38%

2019 400,000 38%

2020 450,000 38%

ii. On January 1, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book[1*] purposes and the tax depreciation taken each year is listed below:

Tax Depreciation

2017 2018 2019 2020 Total

$264,000 $360,000 $120,000 $56,000 $800,000

iii. On January 1, 2018, $360,000 was collected in advance for rental of a building for a three-year period. The entire $360,000 was reported as taxable income in 2018, but $240,000 of the $360,000 was reported as unearned revenue at December 31, 2018 for book purposes.

Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2017.

Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2018.

Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2019.

[1*] Remember book purposes is same as financial reporting purposes