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.)
Account Titles and Explanation
(To record sales)
(To record warranty claims)
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