Brief Exercise $8-11($Algo$)$ Record warranty liability $($LO$8-5)$

Cloudy introduces a new compact music player that carries a two$-$year warranty against manufacturer's defects. Based on industry experience with similar product introductions, warranty costs are expected to be approximately $1\%$ of sales. By the end of the first yea of selling the product, total sales are $$29\mathrm{.}3$ million, and actual warranty expenditures are $$130,000.$

Record the adjusting entry for the remaining expected future warranty costs as of December $31,$ the end of the reporting period. $($If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field. Enter your answer in dollars, not millions. For example, $$5\mathrm{.}5$ million should be entered as $5,500,000.)$

Journal entry worksheet

$1$

Record the adjusting entry for the remaining expected future warranty costs as of December $31,$ the end of the reporting period.