Gallo Light began operations in 2016. The company sometimes sells used warehouses on an installment basis. In those cases, Gallo Light reports income in its income statement in the year of the sale. In its income tax return, though, Gallo Light reports installment income by the installment method. Installment income in 2016 was $85,800, which Gallo Light expects to collect equally over the next three years. The tax rate is 30%, but based on an enacted law, is scheduled to become 35% in 2018.

Gallo Light’s pretax accounting income from the 2016 income statement was $823,000, which includes $33,000 of interest revenue from an investment in municipal bonds. There were no differences between accounting income and taxable income other than those described above.

Required:

1. Prepare the appropriate journal entry to record Gallo Light’s 2016 income taxes. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field. Enter your answer in thousands. Round your answers to 2 decimal places.)

2. What is Gallo Light’s 2016 net income?