A Company Has a Deferred Tax Liability of $20,000 at the Beginning

question 26

Essay

A company has a deferred tax liability of $20,000 at the beginning of the fiscal year relating to a taxable temporary difference of $80,000. The current year tax rate is 30%.
Required:
Provide the journal entry to reflect the tax rate change.

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Definitions:

Credits

Accounting entries that increase liabilities or decrease assets, or record income in double-entry bookkeeping.

Journal Entry

A Journal Entry is a record in bookkeeping that logs the debit and credit parts of a financial transaction in accounting.

Credits

Entries that increase liabilities or equity accounts, or decrease asset or expense accounts in accounting.