Answer:
A. Dr Warranty Expense $30,000.00
Cr Warranty Payable $30,000.00
B. Dr Warranty Payable Dr $445.00
Cr To Parts inventory $325.00
Cr To Wages payable $120.00
Explanation:
Preparation of Journal entries
A. Preparation of the Journal entry to record the accrued product warranty
Dr Warranty Expense $30,000.00
($1,500,000*2%)
Cr Warranty Payable $30,000.00
(Being to record warranty provision)
B. Preparation of the Journal entry to record the warranty work provided in February.
Dr Warranty Payable $445.00
($325.00+$120.00)
Cr To Parts inventory $325.00
Cr To Wages payable $120.00
(Being to record repair under warranty by customer)
