blackboard. kean.edu S11-5 Determining current portion of long-term note payable Learning objective 1 On January 1, Garland Company purchased equipment ofS120,000 with a long-term note payable. The debt is payable in annual installments of $24,000 due on December 31 of each year. At the date of purchase, how will Garland Company report the note able S11-11 Accounting for warranty expense and warranty Learning objective 3 payable Hipster Corrector guarantees its snowmobiles for three years. Company experience indicates that warranty costs will be approximately 3% of sales Assume that the Hipster dealer in Colorado Springs made sales totaling $350,000 during 2016. The company received cash for 20% of the sales and notes receivable for the remainder Warnanty payments totaled S8,000 during 2016 Requirements 1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold 2. Post to the Estimated Warranty Payable T-account. At the end of 2016, how much in Estimated Warranty Payable does the company owe? Assume the Estimated Warranty Payable is so on January 1, 2016 2 Accounting treatment for contingencies Learning objective Fernandez Motors, a motorcycle manufacturer, had the following contingencies. a. Fernandez estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Fernandez's attorneys estimate the potential loss will be $3,200,000 b. Fernandez received notice that it was being sued. Fernandez considers this lawsuit to be frivolous. Fernandez is currently the defendant in a lawsuit. Fernandez believes it is likely that it will lose the lawsuit and estimates the damages to be paid will be $60,000 Determine the appropriate accounting treatment for each of the situations Fernandez is facing