Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2021. The enacted tax r

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Wynn Farms reported a net operating loss of $160,000 forfinancial reporting and tax purposes in 2021. The enacted tax rateis 25%. Taxable income, tax rates, and income taxes paid in Wynn’sfirst four years of operation were as follows: Taxable Income TaxRates Income Taxes Paid 2017 $ 75,000 20 % $ 15,000 2018 85,000 2017,000 2019 140,000 25 35,000 2020 75,000 40 30,000 Required: 1.Prepare the journal entry to recognize the income tax benefit ofthe net operating loss. NOL carrybacks are not allowed for mostcompanies, except for property and casualty insurance companies aswell as some farm-related businesses. Assume Wynn is one of thosebusinesses. 2. Show the lower portion of the 2021 income statementthat reports the income tax benefit of the net operating loss.