Brief Exercise $16-2($Algo$)$ Temporary difference for depreciation; financial statement effects $[$LO$16-2]$

Kara Fashions uses straight$-$line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Kara's buildings has a book value of $$520,000$ and a tax basis of $$390,000.$ There were no other temporary differences and no permanent differences. Taxable income was $$4$ million and Kara's tax rate is $25\%.$

What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $$23,000$ the previous year, prepare the appropriate journal entry to record income taxes this year.

Complete this question by entering your answers in the tabs below.

$$ General Journal

Assuming that the deferred tax liability balance was $$23,000$ the previous year, prepare the appropriate journal entry to record income taxes this year.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in whole dollars.

Show less $4$

View transaction list

$\backslash$table$[[$No$,$Transaction,General Journal,Debit,Credit$],[1,1,$Income tax expense,,$],[,,$Income tax payable,,$],[,$Deferred tax liability,$32,500,,]]$ Need the General Joirnal entries. Thanks!