Problem $3$

$(8$ points$)$

Paut Inc. began operations in $2023.$ The compary sometimes sells land oe an installment hasis. In those cases, Paul Inc. roports income in its income statersent in the yoar of the sale. In its income tax return, though. Paell lnc$,$ repoets installment income by the inatallment method. Installment income in its income statement in $2023$ was $$150,000,$ which Paul inc. expects to collect equally over the next three years $($iie$.2024,2025,$ and $2026).$ The current tax rate is $30\%,$ bot hased on an enacted law, is scheduled to become $25\%$ in $2025.$

Paul lscis pretax accounting income from the $2023$ income statement was $5900,000,$ which includes $$15,000$ of interest revenue from an investrnent in municipal boeds.

There were no differenoes between accounting income and taxable income other than those described above.

a$.$ Prepare the appropriate journal entry to recond Paal linc, $\text{'}$s $2023$ income taxes. Show calculations. $(6$ points$)$

$\backslash$table$[[$Account Description,Debit,Crodit$],[,,],[,,],[,,]]$

Workings:

b$.$ What is Paul Inc.$\text{'}$s effective rate for $2023?(2$ points$)$