The following information is available for Wildhorse Corporation for 2025.
1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2026-2029.
2. Interest received on municipal bonds was $10,300.
3. Rent collected in advance on January 1, 2025, totaled $61,500 for a 3-year period. Of this amount, $41,000 was reported as unearned at December 31, 2025, for book purposes.
4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years.
5. Income taxes of $167,000 are due per the tax return for 2025.
6. No deferred taxes existed at the beginning of 2025.
Compute taxable income for 2025.
Taxable income for 2025 $ 835000
Compute pretax financial income for 2025.
Pretax financial income for 2025 $ 918300
Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $388,000 in 2026.
