Euro Classics Ltd has been operating a successful business for many years specialising in servicing and reconditioning repairs for classic European automobiles. Servicing costs $750, while reconditioning engines costs $1,400. The business has a reputation for good customer service, an important feature of which is the 12 months parts and labour written warranty provided with each service. On 30 June 2021, the owners decided to introduce the practice of providing for warranty expenses at year-end, thereby establishing a warranty expense in the year the vehicles are serviced or reconditioned, and setting up a provision to cover future warranty expenses as they occur. Past records have been examined, and it has been established that, on average, one in twenty vehicles are subject to a claim under the warranty offered. The costs of warranty have amounted to $400 for serviced vehicles and $940 for reconditioned vehicles. During the year ended 30 June 2021, 490 vehicles were serviced and 250 engines were reconditioned. During the year ended 30 June 2022, 22 serviced vehicles and 15 reconditioned engines were repaired under the warranty. The costs of warranty work carried out by Euro Classics were all paid in cash. During the year, 670 vehicles were serviced and 240 engines were reconditioned. At 30 June 2022, it was decided that warranty costs in the following year would increase by 5%. (Ignore GST.)

(a) Show the general journal entries to record the services/reconditioning for the year, and to establish the provision for warranty at 30 June 2021. (Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2021 June 30 (To record sales for year 2021) June 30 (To provide for future warranty costs) Service revenue Reconditioning revenue Provision for warranty Cash at bank/accounts receivable Warranty expense (b) Show the general journal entries to record sales and the actual warranty costs incurred during the year ended 30 June 2022.(Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) + Date Account Titles and Explanation Debit Credit 2022 June 30 (To record sales for year 2022) June 30 (To record warranty costs) Reconditioning revenue Service revenue Cash at bank Provision for warranty Warranty expense (c) Show the general journal entry to adjust the provision for warranty at 30 June 2022. (Enter debit entries first, followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit June 30 (To adjust provision for future warranty costs) Provision for warranty Service revenue Cash at bank/accounts receivable Reconditioning revenue Warranty expense