Question

In 2018, DFS Medical Supply collected rent revenue for 2019 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy the rental property. The deferred portion of the rent collected in 2018 amounted to $440,000 at December 31, 2018. DFS had no temporary differences at the beginning of the year.

Required:
Assuming an income tax rate of 40% and 2018 income tax payable of $990,000, prepare the journal entry to record income taxes for 2018.

Answer 1

Thank you

Credit Ans Debit Date Account Title and Explanation $814000 December Income Tax Expenses ** 31, 2018 $ 176000 Tax Asset * Defersed Income Tax payable $ 990,000 To record income tax Expense $440,000 x 40% = $176000 notes. tot * Defessed Income tax tax asset - Expense = &qq9000 - $176000 = $ 814000

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