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Indigo Factory provides a 2-year warranty with one of its products which was first sold in 2020. Indigo sold $997,500 of products subject to the
Indigo Factory provides a 2-year warranty with one of its products which was first sold in 2020. Indigo sold $997,500 of products subject to the warranty. Indigo expects $120,250 of warranty costs over the next 2 years. In that year, Indigo spent $71,080 servicing warranty claims. Prepare Indigo's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation 2020 During 2020 (To record sales) 12/31/20 (To record warranty claims) Debit Credit
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