(Answered) Question - in 2016 dfs medical supply collected rent

Accounting

Question - In 2016, DFS Medical Supply collected rent revenue for 2017 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as income in the period tenants occupy the rental property. The deferred portion of the rent collected in 2016 amounted to $400,000 at December 31, 2016. DFS had no temporary differences at the beginning of the year.

Required: Assume an income tax rate of 40% and 2016 income tax payable of $950,000, prepare the journal entry to record income taxes for 2016.

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