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Prepare the year-end journal entries to record income taxes

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Reference no: EM132696322

Problem - The DeVille Company reported pretax accounting income on its income statement as follows:

2018 $370,000

2019 290,000

2020 360,000

2021 400,000

Included in the income of 2018 was an installment sale of property in the amount of $36,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $14,400 in 2019, $18,000 in 2020, and $3,600 in 2021.

Included in the 2020 income was $13,000 interest from investments in municipal bonds. The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required - Prepare the year-end journal entries to record income taxes for the years 2018-2021.

Reference no: EM132696322

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