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On September 11, 2017, Home Store sells a mower (that costs $200) for $500 cash with a one-year warranty that covers parts. Warranty expense is estimated at 8% of sales. On July 24, 2018, the mower is brought in for repairs covered under the warranty requiring $35 in materials taken from the Repair Parts Inventory. Prepare the September 11, 2017, entry to record the mower sale, and the July 24, 2018, entry to record the warranty repairs.

Respuesta :

Answer:

Journal entries

Explanation:

The journal entries are shown below:

On September 11, 2017

Cash Dr $500

     To Sales $500

(Being the sales is recorded)

On September 11, 2017

Warranty expense $40                ($500 × 8%)

         To Estimated warranty liability $40

(Being the warranty expense is recorded)

On July 24, 2018

Estimated warranty liability $35

            To Repairs parts inventory $35

(Being the warranty repairs are recorded)

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