Dynamo Corporation manufactures toasters. Each toaster comes with a 5-year assurance type warranty. The toasters sell for $50 each. During year 1, they sell 500 toasters, for cash. Past experience shows that the average warranty costs are $5 esch or $2,500 for these toasters. In yesr 1, Dynamo pays $600 cash for warranty costs on the toasters sold that year. Prepare Dynamos journal enteries related to the sales and warranty in Year 1

structions Chart of Accounts CHART OF ACCOUNTS Dynamo Corporation General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable EXPENSES 141 Inventory 152 Prepaid Insurance 500 Cost of Goods Sold 511 Insurance Expense 181 Equipment 512 Utlities Expense 189 Accumulated Depreciation 521 Salaries Expense LIABILITIES 532 Bad Debt Expense 211 Accounts Payable 540 Interest Expense 231 Salaries Payable 541 Depreciation Expense 240 Estimated Warranty Liability 551 Warranty Expense 250 Unearned Revenue 559 Miscellaneous Expenses 261 Income Taxes Payable 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings Check My Work All work saved. S DOLL