Ecco Company sold $147,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 6% of the sales price. On October 15, a customer required a $120 part replacement, plus $84 labor under the warranty.
a. Provide the journal entry for the estimated expense on September 30.
b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.
| A | Product warranty expense | 8820 | |
| Product warranty payable | 8820 | ||
| (147,000*6%) | |||
| B | Product warranty payable | 204 | |
| Supplies | 120 | ||
| Wages payable | 84 | ||
Ecco Company sold $147,000 of kitchen appliances with six-month warranties during September