In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
2021 | $ | 420,000 | |
2022 | 340,000 | ||
2023 | 410,000 | ||
2024 | 450,000 | ||
Included in the income of 2021 was an installment sale of property
in the amount of $58,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $23,200 in 2022, $29,000 in 2023, and
$5,800 in 2024.
Included in the 2023 income was $24,000 interest from investments
in municipal governmental bonds.
The enacted tax rate for 2021 and 2022 was 40%, but during 2022,
new tax legislation was passed reducing the tax rate to 25% for the
years 2023 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the
years 2021–2024. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)