Nueve Ltd. had the following pre-tax earnings and losses: Year Pre-tax Earnings (Loss) Tax Rate 20X3 $ 390,000 35% 20X4 225,000 35 20X5 600,000 35 20X6 720,000 37 20X7 20X8 20x9 (3,390,000) 37 435,000 975,000 37 40 The tax rates are those effective for the year indicated. The rates were enacted the year in which they became effective. Taxable income (loss) was equal to accounting earnings (loss) in each year. Required: 1. Prepare the entry to record income tax expense for 20X7. At the end of 20X7, management estimates it is probable Nueve will utilize only $265,000 of the loss carryforward. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)