4.2 Prepare the tax effect Journal Entries for the following c. Plant and machinery were acquired for $200,000 on 1 July. Accounting depreciation is 25% p.a. and tax depreciation is 30% p.a. Account Debit Credit Income Tax Expense $3,000 Deferred Tax Liability $3,000 Explanation: Carrying amount ( 200,000 - 50,000) Less future taxable amount.= 150,000 Future deduction - (200,000 - 60,000) Tax Base = 140,000 Carrying amount - tax base = 150,000 - 140,000