Question

In 2018, Ryan Management collected rent revenue for future tenant occupancy. The deferred portion of the rent collected in 2018 was $40 million.

The revenue was to be earned evenly over the subsequent two years (2019 and 2020). For 2019, taxable income is $140 million. No temporary differences existed at the beginning of 2019. The tax rate assumed for all years is 30%.
  
Prepare the appropriate journal entry to record income taxes in 2019. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Record 2019 income tax expense

Answer 1

Journal Entry ( $ in Million)
Date	General Journal	Debit	Credit
2019	Income Tax Expense (bal)	$30.00
	Deferred Tax Asset (40*30%)	$12.00
	Income Tax Payable (140*30%)		$42.00