Answer:
income tax expense 156,000 debit
    deferred income tax liability  70,000 credit
    income tax payable               86,000 credit
schedule:
                       2021          2022    2023   2024 
depreciation 120,000 120,000 120,000 120,000 
litigation                                                     (70,000)
rent revenue                                                60,000
taxable income 120,000 120,000 120,000 110,000 
                         2021       2022      2023           2024
beginning          70,000   46,000   22,000        (2,000)
dep adjustment (24,000) (24,000)  (24,000)   (24,000)
rent revenue                                                         12,000
litigation                                                               14,000
ending                46,000   24,000     (2,000)*             0
Explanation:
pretax income                         800,000
permanent difference:
municipal bonds interest        (20,000)
accounting taxable income   780,000
temporary difference:
depreciation expense (480,000)
litigation                          70,000
rent revenue                   60,000
taxable income                      430,000
480,000 / 4 = 120,000
we have income tax payable: 430,000 x 20% = 86,000
income tax expense 780,000 x 20% = 156,000
deferred tax income laibility 156,000 - 86,000 = 70,000
*on the tax schedule as the value switches to negative we no longer have a tax liability but asset. 
the municipal bonds are not considered into calcualtikon as they are tax exempt therefore do not create temporary difference.