Illustrate the effects on the accounts and financial statements of recording the following selected transactions of LoneStar Leather Co.:
Apr. 15. Paid the first installment of the estimated tax for the current fiscal year ending December 31, $90,000. No entry had been made to record the liability.
Dec. 31. Recorded the estimated income tax liability for the year just ended and the deferred income tax liability, based on the April 15 transaction and the following data:
Income taxrate 40%
Income before income tax $950,000
Taxable income according to tax return $800,000
Assume that June 15 and September 15 installments of$90,000 were also paid.