(Solution) - Using the same information provided in E17 8 assume that -(2025 Original AI-Free Solution)

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Using the same information provided in E17- 8, assume that Meyer- Swift invested in tax- free municipal bonds. The bonds pay interest of $ 1,000 each year. In addition, a new tax law enacted at the beginning of year 2 reduced the corporate tax rate to 30%.
In E17-8

Required
a. Prepare the journal entries required to record the tax provision for all three years, as well as the journal entry needed to record the effect of the tax rate change on any deferred tax accounts.
b. Determine the net income reported on the income statement for all three years.
c. Prepare the footnote, in dollars and percentages, required to reconcile the company?s federal statutory income tax rate with its effective tax rate.