Granger Co. at the end of 2016, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:

Pretax financial income	$500,000
Fines paid	$50,000
Estimated litigation expense	$1,250,000
Installment sales	($1,000,000)
Taxable income	$800,000

The estimated litigation expense of $1,250,000 will be deductible in 2018 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $500,000 in each of the next two years. The income tax rate is 30% for all years.

Part A The income tax expense is:

Part B The tax journal entry for 2016.

Part C The effective tax rate for 2016 is: