A company restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 4% of sales. Sales for the month of December are $580,000. Actual warranty expenditures in January of the following year were $22,000

2. & 3. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Journal Entry Worksheet

a. Record the contingent liability for warranties.

b. Record the actual warranty expenditures.