For the year ended December 31, 2013, Nelson Co.'s income statement showed income of $435,000 before income tax expense. To compute taxable income the following differences were noted:

Income from tax-exempt municipal bonds .......................................$ 60,000

Depreciation deducted for tax purposes in excess of

depreciation recorded on the books ................................................ 120,000

Proceeds received from life insurance on death of an insured employee ...... 100,000

Corporate tax rate for 2013 .......................................................... 30%

Enacted tax rate for future periods .................................................. 35%

Required:

1. Calculate taxable income and tax payable for tax purposes.

2. Prepare Nelson's income tax journal entry at the end of 2013.