Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations

upgrading their computer systems, and it backs each notebook it sells with a $90-$day warranty against defects. Based on previous

experience, Computer Wholesalers expects warranty costs to be approximately $5\%$ of sales. Sales for the month of December are

$$420,000.$ Actual warranty expenditures in January of the following year were $$14,000.$

Required:

Record warranty expense and warranty liability for the month of December based on $5\%$ of sales.

Record the payment of the actual warranty expenditures of $$14,000$ in January of the following year.

Complete this question by entering your answers in the tabs below.

Record warranty expense and warranty liability for the month of December based on $5\%$ of sales.

Note: If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.

Journal entry worksheet

$1$

Record the contingent liability for warranties.

Note: Enter debits before credits.