Prepare the journal entries to record income taxes

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Reference no: EM131292321

Kamtech Properties uses straight - line depreciation for financial reporting purposes for equipment costing $1,000,000 and with an expected useful life of four years and no salvage value. For tax purposes, the deduction is 40%, 30%, 20% and 10% in those four years. Pretax accounting income the first year the equipment was used was $800,000 which includes interest revenue of $20,000 from municipal bands. There are no other differences between the two incomes. The enacted tax rate is 40% .

Prepare the journal entries to record income taxes.

Reference no: EM131292321

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