Temporary Differences, Deferred Tax Liabilities, Change in Tax Rate. Simm-Mills Incorporated (SMI) acquired a piece of equipment at a total cost of $4,200,000. SMI uses the straight-line method for financial reporting and an accelerated method for tax purposes. The asset has a six-year life for book purposes and tax purposes. There is no estimated scrap value. SMI is subject to a 40% tax rate. We present the income and depreciation summary for both tax and GAAP below.

1	$920,000	$840,000	$700,000
2	1,600,000	1,344,000	700,000
3	1,780,000	806,400	700,000
4	2,100,000	483,840	700,000
5	1,750,000	483,840	700,000
6	1,200,500	241,920	700,000
Totals	$4,200,000	$4,200,000

A) Determine the balance of the deferred tax account at the end of each year.

B) Prepare the journal entries to record the tax provision for each year.