The long-term liabilities section of CPS Transportation's December 31, 2020. balance sheet included the following: (EV of $1. PV of si EVA of S1, PVA of $1. FVAD of S1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) a. A lease liability with 15 remaining lease payments of $42.000 each, due annually on January 1: Lease liability Less: current portion $319,455 10,054 $389,401 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, 2020, for $600,000. 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 2021 through 2024 is as follows: Year 2021 2022 2023 2024 MACRS Depreciation $192,000 96.000 86,000 76,000 Straight-line Depreciation $120,000 120,000 120,000 120. eee Difference $ 72,880 (24,000) (34,000) (44,000) The enacted federal income tax rates are 20% for 2020 and 25% for 2021 through 2024. CPS had a deferred tax liability of $7500 as of December 31, 2020. For the year ended December 31, 2021, CPS's income before income taxes was $1.000.000 On July 1, 2021, CPS Transportation issued $700,000 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: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2021. 2. Determine CPS Transportation's interest expense for the year ended December 31, 2021 3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2021, balance sheet Year 2021 2022 2023 2824 Depreciation $192,000 96,000 86,000 76,000 Depreciation $120,000 120,000 120,000 120,000 Difference $ 72,000 (24,000) (34,000) (44,000) The enacted federal income tax rates are 20% for 2020 and 25% for 2021 through 2024. CPS had a deferred tax liability of $7,500 as of December 31, 2020. For the year ended December 31, 2021, CPS's income before income taxes was $1,000,000. On July 1, 2021, CPS Transportation issued $700,000 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: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2021. 2. Determine CPS Transportation's interest expense for the year ended December 31, 2021 3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2021, balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2021. (Enter your answers in whole dollars.) CPS TRANSPORTATION Income Tax Expense and Net Income For the Year Ended December 31, 2021 Income before income taxes Income tax expense: Current Deferred Net Income