acturing Co. warrants its products for one year. The estimated product January.

Question

acturing Co. warrants its products for one year. The estimated product January. On February 7, a customer received warranty repairs requiring $220 of parts and $60 of labor a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. Refer to the Chart of Accounts for exact wording of account titles. b. Journalize the entry to record the warranty work provided in February. Refer to the Chart of Accounts for exact wording of

Explanation / Answer

Solution:

a) Preparing Adjusting Entry Required at January 31, the End of the First Month of the Current Fiscal Year:

b) Preparing the Journal Entry to Record the Warranty Work Provided in February:

Date General Journal Debit Credit January 31 Product Warranty Expense ($620,000 * 4%) $24,800 Product Warranty Payable $24,800 (To record the Accrued Product Warranty)

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