Problem
In 2016, Progressive Corp had a $24 million net operating loss in 2016 (for both tax and financial reporting purposes). Progressive reported taxable income of $20 million in 2015 and reported taxable income of $2 million in 2014. The enacted tax rate for all three years (2014 - 2016 is 15%. Progressive elects the carryback option for this NOL.
Provide the entry to recognize the tax benefit at the end of 2016. Prepare the journal entry to recognize the income tax.