Question

In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $106 million. Taxable income is $460 million in 2021. No temporary differences existed at the beginning of the year, and the tax rate is 25%.

  
Prepare the appropriate journal entry to record income taxes in 2021.

Answer 1

The answer has been presenetd in the supporting sheet. For detailed answer refer to the supporting sheet.

answer Journal Entry Date 31, December 2021. account Title Income Tax Expense (115-26.5) Deferred Tax Asset (106*25%) Income Tax Payable (460*25%) (to record income tax expense) Debit (amount in $ Crebit amount in millions) millions) 88.5 26.5 For any help please comment in the comment box Thank You