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Logan Manufacturing Co . warrants its products for one year. The estimated product warranty is 4 % of sales. Assume that sales were $ 7

Logan Manufacturing Co. warrants its products for one year. The estimated product warranty is 4% of sales. Assume that sales were $700,000 for January. In February, a customer received warranty repairs requiring $210 of parts and $65 of labor.
Required:
a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty.*
b. On February 28, journalize the entry to record the warranty work provided in February.*
*Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. CHART OF ACCOUNTS
Logan Manufacturing Co.
General Ledger
ASSETS
110 Cash
111 Accounts Receivable
112 Interest Receivable
113 Notes Receivable
115 Merchandise Inventory
116 Supplies
118 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
125 Office Equipment
126 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
213 Interest Payable
214 Notes Payable
215 Wages Payable
216 Social Security Tax Payable
217 Medicare Tax Payable
218 Employees Federal Income Tax Payable
219 Employees State Income Tax Payable
221 Retirement Savings Deductions Payable
224 Federal Unemployment Tax Payable
225 State Unemployment Tax Payable
226 Vacation Pay Payable
227 Unfunded Pension Liability
228 Product Warranty Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
520 Wages Expense
524 Depreciation Expense-Building
525 Delivery Expense
526 Repairs Expense
529 Selling Expenses
531 Rent Expense
532 Depreciation Expense-Office Equipment
533 Insurance Expense
534 Supplies Expense
535 Payroll Tax Expense
536 Vacation Pay Expense
537 Pension Expense
538 Cash Short and Over
539 Product Warranty Expense
540 Miscellaneous Expense
710 Interest Expense Scroll down to access page 2 of the journal.
a. Journalize the adjusting entry required at January 31, the end of the first month of the current fiscal year, to record the accrued product warranty. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
How does grading work?
PAGE 1
JOURNALACCOUNTING EQUATION
Score: 21/25
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
1
Adjusting Entries
Jan. 31
Product Warranty Expense
11,820.00
Product Warranty Payable
11,820.00
Points:
4.2/5
b. On February 28, journalize the entry to record the warranty work provided in February. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
How does grading work?
PAGE 2
JOURNALACCOUNTING EQUATION
Score: 31/37
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY
Jan. 31
Product Warranty Payable
11,820.00
Wages Payable
65.00
Supplies
136.00
Points:
5.86/7
Check My Work
a. The accrued product warranty amount is recorded in the same period in which the sale is recorded, therefore following the matching concept.
b. Consider what resources the company will have to use in order to satisfy the warranty.

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