The following information is available for Coug Corporati on for 2015. There is no beginning deferred taxes.

6.Life insurance proceeds on the ex-CEO is $2,500,000 which was paid on Dec. 1, 2015.

7.Life insurance premium for the ex-CEO is $12,500 which was paid on Feb. 1, 2015.

8.No deferred taxes existed at the beginning of 2015.

(a) Compute Taxable income for 2015

(b) Prepare the Journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2015 and 2016. Assume Taxable income was $4,000,000 in 2016.

(c) Prepare the income tax expense section of the income statement for 2015, beginning with "Income before income taxes."