At the end of 2020, Payne had deferred tax asset account with a blance of $85 million attibutable to temporary book-tax difference $340 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $256 million. Payne no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $612 million and tax rate is 25%.
Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.