Adirondack, the car manufacturer, guarantees its vehicles for three years or 100 000 kilometres, whichever comes first. Suppose Adirondack's experience indicates that it can expect warranty costs to equal 5% of sales. Assume that Young Adirondack in Adelaide makes sales of Adirondack Karrs totalling $585 000 during 2016, its first year of operations. The business receives cash for 20% of the sales and loans receivable for the remainder. Payments to satisfy customer warranty claims totalled $16 000 during 2016. (These payments are not reimbursed by Adirondack.) Requirements Requirement 1. Record the sales, warranty expense and warranty payments for Young Adirondack. (Record debits first, then credits. Explanations aren't required.) First, record the sales. Journal Entry Accounts Debit Credit