A corporation has an income tax rate of 35%, taxable income of $100,000, and income before income tax of $100,000. Which of the following would be included in the entry to record income tax expense?

Question

Quizplus · Accepted Answer

The correct journal entry to record income tax expense includes debiting income tax expense for $35,000 (35% of $100,000) and crediting income tax payable for $35,000, reflecting the amount owed to the government. This corresponds to options B and C. Option A is incorrect because a deferred tax liability would only be recorded if there were temporary differences between accounting income and taxable income, which is not indicated in the scenario.

A Corporation Has an Income Tax Rate of 35%, Taxable