The Durn Company began operations at the beginning of 2007. At the end of 2007 the company reported taxable income of $9,800 and pretax financial income of $11,200, because of a single temporary difference. The income tax rate for the current year is 30%, but Congress has enacted a 40% tax rate for 2008 and beyond.
Required
Prepare the income tax journal entry of the Durn Company at the end of 2007.