uporary differences. The following information is available for the first three years of operation for Cooper Company: Year Pretax financial income 2017 2018 2019 $604,000 815,000 240,000 2. On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each is listed below: 2017--$264,000 2018--$360,000 2019--$120,000 2020--$56,000 3. On January 2, 2018. $360,000 was paid in advance for rental of a building for a three-year period. The entire $360,000 was reported as a tax deduction in 2018, but $240,000 of the $360,000 was reported a prepaid rent at December 31, 2018 for book purposes. 4. The enacted tax rates are $40% for all years. Instructions a. Prepare a schedule reconciling pretax financial income and taxable income and determining taxes payable for 2017, 2018, and 2019. Future Years 2019 2018 2017 Credit Pretax financial income Debit MIME Accounts h Prepare the journal entry to record income tax expense, deferred Income taxes, and income tax payable for 2018 40