Question

1. 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 $50 million. Taxable income is $180 million in 2021. No temporary differences existed at the beginning of the year, and the tax rate is 25%.

2. A company reports pretax accounting income of $10 million, but because of a single temporary difference, taxable income is $12 million. 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Answer 1

Solution 1:

Journal Entries - Ryan Management (In millions)
Date	Particulars	Debit	Credit
31-Dec-21	Income tax expense Dr	$32.50
	Deferred tax assets Dr	$12.50
	To Income taxes payable		$45.00
	(To record income tax expense)

Solution 2:

Journal Entries (In millions)
Event	Particulars	Debit	Credit
1	Income tax expense Dr	$2.50
	Deferred tax assets Dr	$0.50
	To Income taxes payable		$3.00
	(To record income tax expense)