Beyonce Ltd offers warranty for the sale of its products. On 1 January 2020, there was a credit balance of $25,000 in its warranty provision account. On 30 October 2020, Beyonce Ltd replaced goods under warranty at a cost of $22,000 using goods from its own inventory. At 31 December 2020, Beyonce Ltd estimated its liability for unexpired warranty contracts as $27,500.

Required

a) Prepare a journal entry to record the warranty claims on 30 October 2020. (1 mark)

b) Prepare a journal entry at the year end 31 December 2020 to record the end-of-period adjustment to the Warranty Provision account. (1 marks)

Narrations are not required.