SOLUTION: 1 | |||||
Journal Entries | |||||
Date | Account Title and explanation | Debit | Credit | ||
2018 | Cash ($ 500,000 X 10%) | $ 50,000 | |||
Note Receivable | $ 4,50,000 | ||||
Sales Revenue | $ 5,00,000 | ||||
2018 | Warranty Expenses ($ 500,000 X 3%) | $ 15,000 | |||
Estimated Warranty Payable | $ 15,000 | ||||
(To Record the warranty Expenses of the year) | |||||
2018 | Estimated Warranty Payable | $ 12,000 | |||
Parts Inventory | $ 12,000 | ||||
(To Record the consumption of warranty) | |||||
SOLUTION: 2 | |||||
Estimated Warranty Payable | |||||
$ - | Beginning balance | ||||
Parts inventory | $ 12,000 | $ 15,000 | Warranty Exenses of the year | ||
Balance at year end | $ 3,000 | ||||
Total | $ 15,000 | $ 15,000 | Total | ||
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