Problem $16-3($Algo$)$ Change in tax rate; single temporary difference; financial statement effects $[$LO$16-2,16-6]$

Dixon Development began operations in December $2024.$ When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in $2024$ for lots sold this way was $$18$ million, which will be collected over the next three years. Scheduled collections for $2025-2027$ are as follows:

$\backslash$table$[[2025,$$$6$ million$],[2026,10$ million$],[2027,2$ million$],[,$$$18$ million$]]$

Pretax accounting income for $2024$ was $$26$ million. The enacted tax rate is $35\%.$

Required:

Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in $2024.$

Suppose a new tax law, revising the tax rate from $35\%$ to $30\%,$ beginning in $2026,$ is enacted in $2025,$ when pretax accounting income was $$22$ million. No $2025$ lot sales qualified for the special tax treatment. Prepare the appropriate journal entry to record income taxes in $2025.$

If the new tax rate had not been enacted, what would have been the appropriate balance in the deferred tax liability account at the end of $2025?$

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

Suppose a new tax law, revising the tax rate from $35\%$ to $30\%,$ beginning in $2026,$ is enacted in $2025,$ when pretax accounting income was $$22$ million. No $2025$ lot sales qualified for the special tax treatment. Prepare the appropriate journal entry to record income taxes in $2025.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in millions rounded to $1$ decimal place $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$

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