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Aim Inc. had the following activity for the years 2020-2022. Prepaid maintenance contract: $30,000 on January...

Aim Inc. had the following activity for the years 2020-2022.

  • Prepaid maintenance contract: $30,000 on January 1, 2020, for a three-year period beginning January 1, 2020
  • Deferred rental revenue: $45,000 on January 1, 2020, for a three-year period beginning January 1, 2020
  • Pretax GAAP income is $500,000, $388,000, and $425,000 for the years 2020, 2021, and 2022, respectively.
  • Enacted tax rates are 25% for years 2020 and 30% for the year 2021 and 2022.
  • There were no balances in the deferred tax accounts on January 1, 2020

A.        Compute taxable income for 2020.

B.        Prepare the 2020 Journal Entry to record deferred taxes.

C.        Prepare the Journal Entry to record deferred taxes for 2021
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