Question - Texas Corporation began operations in January 2013 and purchased a machine for $21,000. Texas uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2013, 30% in 2014, and 20% in 2015. Pretax accounting income for 2013 was $116,000, which includes interest revenue of $30,000 from municipal bonds. The enacted tax rate is 35% for all years. There are no other differences between accounting and taxable income.

Required: Prepare a journal entry to record income taxes for the year 2013. Show well-labeled computations for the amount of income tax payable and the change in the deferred tax account.