At the beginning of 2012, Barbara, Inc. has a deferred tax asset of $8,000 and deferred tax liability of $6,500. In 2012, pretax financial income was $600,000 and the tax rate was 35%.

Pretax income included:

Interest income from municipal bonds $25,000
Accrued warranty costs, estimated to be used in 2013 $74,000
Prepaid rent expense, will be used in 2013 $16,000
Installment sales revenue, to be collected in 2013 $45,000
Operating loss carryforward $36,000

What is the adjustment needed to correct the balance of deferred tax asset for 2012?

a) $ 17,900 DR

b) $ 21,350 CR

c) $ 21,350 DR

d) $ 25,900 DR