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The journal entry to recognize Baginski’s 2025 tax expense includes a Debit to Income tax expense and Credit to Income tax payable.
<h3>What is a tax expense or benefit?</h3>
The tax expense refers to the total amount of taxes owed by an individual, corporation or other entity to a taxing authority while the tax benefit refers to the refers to any tax law that helps one reduce tax liability.
In accounting, the companies record an income tax expense as a debit and income tax payable as a credit in journal entries.
<h3>Journal entry to recognize Baginski’s 2025 tax expense or tax benefit.</h3>
Date General Journal Debit Credit
Income tax expense $62,500
($250,000 * 25%)
Income tax payable $62,500
(To record the tax expense for 2025)
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