Grizzly Inc. computed a pretax financial income of $40,000 for the first year of its operation ended December 31, 2014. Analysis of the tax and book basis of its liabilities disclosed $360,000 in unearned rent revenue on the books that had been recognized as taxable income in 2014 when the cash was received
the unearned rent is expected to be recognized on the books in the following pattern
2015 90000
2016 160000
2017 70000
2018 40000
the enacted tax rates for this year and the four next years are
2014 40%
2015 36%
2016 33%
2017 30%
2018 32%
1. prepare a schedule showing the reversal of the temporary difference and the computation of income taxes payable and deferred tax assets or liabilities as of December 31, 2014
2. prepare journal entries to record income taxes payable and deferred income taxes