The Great Scott Company meets the requirements to report financial information on its tax return. This year, it purchased a new business asset. On its books, it depreciates the asset over seven years. However, on the tax return, it expensed the entire cost of the asset using a Section 179 deduction. The Great Scott Company must explain the discrepancy between the books and tax depreciation by making an entry on:

Schedule K.

Schedule L.

Schedule M-1.

Schedule M-2.