Answer:
Income tax expense (Balancing figure) $13,200,000
To Deferred tax liability (8% × $15,000,000) $1,200,000
To Income tax payable ($30,000,000 × 40%) $12,000,000
(Being the income tax expense is recorded)
Explanation:
The compound journal entry is shown below:
Income tax expense (Balancing figure) $13,200,000
To Deferred tax liability (8% × $15,000,000) $1,200,000
To Income tax payable ($30,000,000 × 40%) $12,000,000
(Being the income tax expense is recorded)
For recording this, we debited the income tax expense as it increased the expenses and at the same time it also increased the liabilities i.e deferred tax liability and income tax payable so it would be credited
