In 2018 Marshall Ltd. began offering a three-year warranty on its product. To date, Marshall has expensed warranty costs when incurred, rather than making a provision for them each year. During the audit of its December 31, 2020 results, the external auditors discovered this oversight and they have requested that Marshall correct the error. Specifics of the warranty follow:

Year Costs expensed Estimated provision required*

2018 $ 89,000 $260,000

2019 194,000 290,000

2020 321,000 340,000

* This is the amount that should have been expensed originally and set up as a provision for warranty claims at the time of sale for the given year.

Assume that the rest of the adjusting journal entries have been made, but that closing entries have not yet been made. Ignore any tax implications.

Required:

a) Prepare the journal entry to retrospectively account for this correction of an error.

b) Prepare the journal entry required on December 31, 2020, to adjust Marshalls accounting records to properly recognize the provision for warranty expense