E19-5 (L01,2) (Two Temporary Differences, One Rate, Beginning Deferred Taxes) The following facts relate to Krung Thep Corporation. 1. Deferred tax liability, January 1, 2017, $40,000. 2. Deferred tax asset, January 1,2017, $0. 3. Taxable income for 2017, $95,000. 4. Pretax financial income for 2017,$200,000 5. Cumulative temporary difference at December 31, 2017,giving rise to future taxable amounts, $240,000. 6. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $35,000. 7. Tax rate for all years, 40%. 8. The company is expected to operate profitably in the future. Instructions(a) Compute income taxes payable for 2017. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017. (c) Prepare the income tax expense section of the income statement for 2017, beginning with the line "Income before income taxes.

On january 1, 2018, gless textiles issued $12 million of 9%, 10-year convertible bonds at 101. the bonds pay interest on june 30 and december 31. each $1,000 bond is convertible into 40 shares of gless’s no par common stock. bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). century services purchased 10% of the issue as an investment. on january 1, 2018, gless textiles issued $12 million of 9%, 10-year convertible bonds at 101. the bonds pay interest on june 30 and december 31. each $1,000 bond is convertible into 40 shares of gless’s no par common stock. bonds that are similar in all respects, except that they are nonconvertible, currently are selling at 99 (that is, 99% of face amount). century services purchased 10% of the issue as an investment. 3. on july 1, 2023, when gless’s common stock had a market price of $33 per share, century converted the bonds it held. prepare the journal entries by both gless and century for the conversion of the bonds (book value method).