The long$-$term liabilities section of CPS Transportation's December $31,2023,$ balance sheet included the following: $(FV$ of $$1,PV$ of $$1,$

FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided.

a$.$ A lease liability with $15$ remaining lease payments of $$10,000$ each, due annually on January $1$:

The incremental borrowing rate at the inception of the lease was $11\%$ and the lessor's implicit rate, which was known by CPS

Transportation, was $10\%.$

b$.$ A deferred income tax liability due to a single temporary difference. The only difference between CPS Transportation's taxable

income and pretax accounting income is depreciation on a machine acquired on January $1,2023,$ for $$500,000.$ The machine's

estimated useful life is five years, with no salvage value. Depreciation is computed using the straight$-$line method for financial

reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for

$2024$ through $2027$ is as follows:

The enacted federal income tax rates are $20\%$ for $2023$ and $25\%$ for $2024$ through $2027.$ CPS had a deferred tax liability of

$$7,500$ as of December $31,2023.$ For the year ended December $31,2024,$ CPS$\text{'}$s income before income taxes was $$900,000.$

On July $1,2024,$ CPS Transportation issued $$800,000$ of $9\%$ bonds. The bonds mature in $20$ years, and interest is payable each

January $1$ and July $1.$ The bonds were issued at a price to yield the investors $10\%.$ CPS records interest at the effective interest

rate.

Required:

Determine CPS Transportation's income tax expense and net income for the year ended December $31,2024.$

Determine CPS Transportation's interest expense for the year ended December $31,2024.$

Prepare the long$-$term liabilities section of CPS Transportation's December $31,2024,$ balance sheet.