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 $3\%$ of sales. By the end of the first year

of selling the product, total sales are $$30\mathrm{.}7$ million, and actual warranty expenditures are $$270,000.$

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

answers 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.

Note: Enter debits before credits.