Lake Computers is a leader in the computer industry with over $56 billion in sales each year. A recent annual report for Lake contained the following note. Warranty We record warranty liabilities at the time of sale for the estimated costs that may be incurred under its limited warranty. Factors that affect our warranty liability include the number of installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy our warranty obligation.

Required: 1. Assume that estimated warranty costs for the current year are $501.7 million and that $412.5 million of warranty work was performed during the year. Provide the journal entries required to recognize warranty expense and the warranty services provided during the year. Assume that all warranty services were paid for with cash. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollar not in millions (i.e., 1,000,000 not 1.0).) view transaction list view general journal Journal Entry Worksheet 1 2 Record warranty liability. Debit Date General Journal Credit Dec 31 No journal entry required Accounts payable Cash Income taxes payable Interest expense *Enter debits before credits Interest payable done Interest revenue try record entry Liability for withholding taxes Note payable Payroll tax expense Property taxes payable