In-Tune Audio Company warrants its products for one year. The estimated product warranty is 3% of sales. Assume that sales were $400,000 for January. In February, a customer received warranty repairs requiring $205 of parts and $300 of labor.
a. Record the adjusting entry required at January 31, the end of the first month of the current year, to record the accrued product warranty.
b. Record the entry for the warranty work provided in February.