Answer:
Journal entries
Explanation:
The journal entries are as follows
For 2020
Income tax expense $174,600
Deferred tax asset $4,000 ($20,000 × 20%)
To Income tax payable $172,720 ($863,600 × 20%)
To Deferred tax liability $5,880 ($29,400 × 20%)
(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)
For 2021
Income tax expense $173,200
Deferred tax asset $1,980 ($9,900 × 20%)
To Income tax payable $167,380 ($836,900 × 20%)
To Deferred tax liability $7,800 ($39,000 × 20%)
(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)
For 2020
Income tax expense $174,600
Deferred tax asset $1,660 ($8,300 × 20%)
To Income tax payable $189,140 ($945,700 × 20%)
To Deferred tax liability $1,920 ($9,600 × 20%)
(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)
