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19 January, 17:22

At December 31, 2020, Concord Corporation has a deferred tax asset of $210,000. After a careful review of all available evidence, it is determined that it is more likely than not that $63,000 of this deferred tax asset will not be realized. Prepare the necessary journal entry.

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  1. 19 January, 18:19
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    Debit deffered tax expenses with $63,000, and credit Allowance for decreasing the deffered tax asset with $63,000.

    Explanation:

    The journal entry will appear in the book of Concord Corporation as follows:

    Details Dr ($) Cr ($)

    Deffered tax expenses 63,000

    Allowance for decreasing the deffered tax asset 63,000

    Being an allowance for decreasing the deffered tax asset to expected net realizable value
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