Use the information for Rode Inc. given in BE19.12. Assume that it is not probable that the entire net operating loss carryforward will be realized in future years. Prepare all the journal entries necessary at the end of 2022.

BE19.12.

Rode Inc. incurred a net operating loss of $500,000 in 2022. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Rode has evidence that it is probable that the company will return to profitability in 2023.