Brief Exercise 13-13

Bonita Factory provides a 2-year warranty with one of its products which was first sold in 2017. Bonita sold $1,080,000 of products subject to the warranty. Bonita expects $113,460 of warranty costs over the next 2 years. In that year, Bonita spent $71,710 servicing warranty claims. Prepare Bonita's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

2017

(To record sales)

During 2017

(To record warranty claims)

12/31/17