Onyx Company's Income Statement Shows Net Profit Before Income Tax

Multiple Choice

Onyx Company's income statement shows net profit before income tax of $38 000. The company's tax return shows taxable income of $34 000. Company's tax rate is 30%. Which of the following entries would be used to record tax expense and tax payable?

A) Debit Income tax expense $11 400, credit Deferred tax liability $1 200 and credit Income tax payable $10 200.
B) Debit Deferred tax liability $10 200 and credit Income tax payable $10 200.
C) Debit Deferred tax liability $1 200, debit Income tax expense $10 200 and credit Income tax payable $11 400.
D) Debit Income tax expense $10 200 and credit Cash $10 200.