Prepare adjusting journal entries as of December as follows: On January Fall Company leased some equipment for $ They made the first of five payments of $ on that day. The bookkeeper incorrectly recorded the transaction as follows on January :
Lease expense $
Cash $
Accrue annual interest expense on the lease in f at
Amortize the lease in over five years.
Prepare the income tax accrual assuming the tax rate is The differences between book and tax are as follows:
Future deductible amounts: Warranty expense and vacation pay from parts b: Estimated warranty expense of of sales has not been recorded yet.
c Accrue unused vacation pay that can be taken in in the amount of $ Estimated warranty expense of of sales has not been recorded yet.
c Accrue unused vacation pay that can be taken in in the amount of $ and cIgnore the other adjusting
entries for this accrual
Future taxable amount: Tax depreciation was $ whereas book depreciation was only $
Taxable income for is $
There were no previous balances in the Deferred Tax Asset or Deferred Tax Liability accounts.
