Prepare the journal entry to record the tax effect

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Assume that Opel Inc. has no temporary or permanent differences. Opel experiences a net operating loss of $4,000 in 2018 and takes advantage of the carryforward provision. The enacted future tax rate is expected to be 35 percent. In 2019, Opel has taxable income of $1,500 prior to adjustment for the NOL carryforward, subject to a 35 percent tax rate.

Question a. Prepare the journal entry to record the tax effect of the $4,000 loss carryforward for 2018.

Question b. Prepare the journal entry to record the income tax expense for 2019.

Reference no: EM132703979

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