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Prepare the journal entry to record income taxes payable

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Reference no: EM132943368

The accounting records of Bonita Inc. show the following data for 2017 (its first year of operations).

  1. Life insurance expense on officers was $11,000.
  2. Equipment was acquired in early January for $298,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Bonita used a 30% rate to calculate depreciation.
  3. Interest revenue on State of Iowa bonds totaled $4,000.
  4. Product warranties were estimated to be $52,000 in 2017. Actual repair and labor costs related to the warranties in 2017 were $11,000. The remainder is estimated to be paid evenly in 2018 and 2019.
  5. Pretax financial income was $896,000. The tax rate is 30%.

Problem (A) Prepare the journal entry for 2017 to record income taxes payable, income tax expense, and deferred income taxes.

Reference no: EM132943368

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