The pretax financial income of Bonita Company differs from its taxable income throughout each of 4 years as follows.

Year ............Pretax Financial Income ......Taxable Income............. Tax Rate

2017....................... $310,000....................... $183,000..................... 35 %

2018......................... 308,000.......................... 231,000..................... 40 %

2019......................... 345,000........................... 279,000 ....................40 %

2020.......................... 408,000........................... 535,000 ....................40 %

Pretax financial income for each year includes a nondeductible expense of $29,900 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2017.

Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 40% was not enacted until the beginning of 2018. (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.)

Date Account Titles and Explanation ..........................................Debit ....................Credit

2017 Income Tax Expense

........................Deferred Tax Liability

........................Income Ta Payable

2018 account one

.....................acount two

(To record the adjustment for the increase in the enacted tax rate.)

Income Tax Expense

................Deferred Tax Liability

................Income Tax Payable

(To record income taxes for 2018.)

2019 Income Tax expense

.........................Deferred Tax Liability

.........................Income Tax Payable

2020 Income Tax Expense

...........Deferred Tax Liability

.............................Income Tax Payable

Prepare the income statement for 2018, beginning with income before income taxes. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Bonita Company Income Statement (Partial)

For the Year Ended December 31, 2018

Income before Income Taxes

Income Tax Expense

...........Current

............Adjustment

............Deferred

Net Income / (Loss)

$ $ $