Lexton began operations in 2015. The company sometimes sells used warehouses on an installment basis. In those cases, Lexton reports income in its income statement in the year of the sale. In its income tax return, though, Lexton reports installment income by the installment method. Installment income in 2015 was $90,000, which Lexton expects to collect equally over the next three years. The tax rate is 30%, but based on an enacted law, is scheduled to become 35% in 2017.
Lextons pretax accounting income from the 2015 income statement was $830,000, which includes $40,000 of interest revenue from an investment in municipal bonds. There were no differences between accounting income and taxable income other than those described above.
1. Prepare the appropriate journal entry to record Lextons 2015 income taxes. Show calculations.
2. What is Lextons 2015 net income?