Journal entry a- THE Company sold equipment (that costs $3,500) for $7,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Journal entry b - THE Company expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the equipment requires on-site repairs that are completed the same day. Journal entry c- The repairs cost $143 for materials taken from the parts inventory. Warranty expense and liability Prepare journal entries to record (a) the equipment's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2.

Journal entry a- THE Company sold equipment (that costs $3,500 ) for $7,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Journal entry b - THE Company expects warranty costs to be 3% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2 , the equipment requires on-site repairs that are completed the same day. Journal entry c - The repairs cost $143 for materials taken from the parts inventory. Warranty expense and liability Prepare journal entries to record (a) the equipment's sale