Turnabout Enterprises provided the following information regarding book- tax differences for its first year of operations:

Installment sales are a normal part of Turnabout€™s operations. The depreciation expense is related to a building costing $ 1,600,000. Income before including any of the book- tax differences above is $ 920,000. Deferred tax assets are expected to be fully realized and, as a result, no allowance account is needed. Turnabout is subject to a 40% income tax rate. Prepare the journal entry/ entries necessary to record the effects of a tax- rate reduction from 40% to 34% effective the beginning of Year 2.

Source of Book-Tax Difference Installment Sales: Income recognized 2-year Warranty Costs: Warranty Expense Depreciation Expense GAAP Tax $100,000 40,000 120,000 $500,000 60,000 80, 000