Celluloid Development began operations in December year 1. Celluloid had product warranty costs of $70,000 expensed for financial reporting purposes in year 1. For tax purposes, only the $15,000 of warranty costs actually paid in year 1 was deducted. The remaining $55,000 will be deducted for tax purposes when paid over the next three years as follows:

		Tax rate
Year 2	$15,000	30%
Year 3	20,000	40%
Year 4	20,000	40%

Pretax accounting income for year 1 was $817,000, which includes interest revenue of $11,700 from municipal bonds. The enacted tax rate for year 1 is 30%.

Required:

1. Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Celluloids year 1 income taxes.
2. What is Celluloids year 1 net income?
3. What is Celluloids year 1 effective tax rate? Is it the same as enacted tax rate and why?