Warranties}

In 2018, Lee Electronics, a franchise of electronics stores located in small towns throughout Canada, sold 450 32-inch televisions for \(\$ 575\) each. The televisions carry an attached three-year warranty for repairs. Lee Electronics estimates that repair costs will average \(2 \%\) of the total selling price.

\section*{Required:}

1. How much is recorded in the Warranty Liability account as a result of selling the televisions during 2018 , assuming no warranty service has yet been performed?

2. Provide the necessary adjusting entry at December 31, 2018 .

\section*{Brief Exercise