BE17-14. Temporary Differences, Deferred Tax Liability, Permanent Differences. [Learning Objectives 2, 3] Wells Junior Apparel Incorporated reported pre-tax book income of $825,000 for the current year. The change in the difference in the basis of plant assets is $210,000, and the book basis is higher than the tax basis. Wells invested in tax-free bonds and earned $78,000 in nontaxable interest income (included in the $825,000 pre-tax income).

Prepare the journal entry required to record the tax expense for the current year assuming a 40% income tax rate.