Bechstein makes and sells DSLR cameras. They give a 1-year warranty which guarantees that if cameras have a minor fault within 1 year of purchase, they will be repaired and if camera have a major fault within 1 year of purchase they will be replaced. Based on the previous 10 years trading data they estimate that 9% of the sales value will have a minor fault and require repairs and 3% of the sales value will have a major fault and require replacement. Total sales to 30 June 2020 were $2,300,000. For the year ended 30 June 2021 Bechstein paid cash of $114,000 to repair cameras with minor faults and replaced $48,000 of goods from camera parts which had major faults, all of which was warranty work.

Required 1. Calculate below the estimate of the Provision for Warranty at 30 June 2020 and prepare the journal entry to record the estimate at 30 June 2020.