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Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to...

Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2021, Lance has a warranty liability of $2 million and taxable income of $85 million. At December 31, 2020, Lance reported a deferred tax asset of $475,000 related to this difference in reporting warranties, its only temporary difference. The enacted tax rate is 25% each year.

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Prepare the appropriate journal entry to record Lance’s income tax provision for 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

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Gedet Debet 21225000 Solution General Journal Income Tax expense Deferred Tax asset [ 2000000 X 25%]-475000 Income Tax payabl

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