Waterway Factory provides a 2-year warranty with one of its products w


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Waterway Factory provides a 2-year warranty with one of its products which was first sold in 2017. Waterway sold $976,100 of products subject to the warranty. Waterway expects $119,940 of warranty costs over the next 2 years. In that year, Waterway spent

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Waterway Factory provides a 2-year warranty with one of its products
which was first sold in 2017. Waterway sold $976,100 of products subject to the warranty. Waterway expects $119,940 of warranty costs over the next 2 years. In that year, Waterway spent $64,080 servicing warranty claims. Prepare Waterway's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date
Account Titles and Explanation
Debit
Credit
2017

(To record sales)

During 2017

(To record warranty claims)

12/31/17

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