Wynn Farms reported a net operating loss of $132,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynns first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2017 $ 68,000 25 % $ 17,000 2018 78,000 25 19,500 2019 112,000 25 28,000 2020 68,000 40 27,200

Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Required:

1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses.

2. Show the lower portion of the 2021 income statement that reports the income tax benefit of the net operating loss.