In the current year, Bruno Corporation collected rent of $3,650,000. For income
ID: 2567999 • Letter: I
Question
In the current year, Bruno Corporation collected rent of $3,650,000. For income tax reporting, the rent is taxed when collected. For financial reporting, the rent is recognized as income in the period earned. At the end of the current year, the unearned portion of the rent collected in the current year amounted to $410,000. Bruno had no temporary differences at the beginning of the current year. Assume an income tax rate of 35%.
The current year's income tax liability from the tax return is $810,000. Prepare the journal entry to record income taxes for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In the current year, Bruno Corporation collected rent of $3,650,000. For income tax reporting, the rent is taxed when collected. For financial reporting, the rent is recognized as income in the period earned. At the end of the current year, the unearned portion of the rent collected in the current year amounted to $410,000. Bruno had no temporary differences at the beginning of the current year. Assume an income tax rate of 35%.
Explanation / Answer
Income tax expense 666500 Deferred tax asset 143500 =410000*35% Income tax payable 810000