Happy Trails USA, a tire manufacturer, guarantees its tires against defects for five years or $60,000$ miles, whichever comes first. Suppose Happy Trails USA can expect warranty costs during the five$-$year period to add up to $6\%$ of sales. Assume that a Happy Trails USA dealer in Denver, Colorado, made sales of $$611,000$ during $2021.$ Happy Trails USA received cash for $35\%$ of the sales and took notes receivable for the remainder. Payments to satisfy customer warranty claims totaled $$20,000$ during $2021.$

Read the requirements.

a$.$ What amount of warranty expense will Happy Trails USA report during $2021?$

During $2021,$ Happy Trails will report warranty expense of

b$.$ Which accounting principle addresses this situation?

The accounting principle that addresses this situation is the