P9-6 Defining and Analyzing Changes in Current Liabilities LO9-1 Intemational Business Machines (18M) is a pading provider of computer products and sorvices, The company is known for is hardintive products but has focused on providing information technoiogy services in recentyears. 1EM provides standard warmintes and extended warranties with the sale of its products. The company's note on significant accounting policirs is as fallows The company offers warranties for its hardware products that generally range up to three years. with the majonty being either one of three years. Estrmated costs for standard wereanty terms are recognized when revenue fis recorded for the related product. The company estimates its warranty costs standard to the product based on historical watranty claim experfence atided entimates of future spending, and applies this estimate to the revenue stream for products under warranty. Estimated future conts for warrantes applicable to revenue recognized in the current period are charged to cost of sales. The wantranty iablify is reviewed quartorty to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation periloo Revenue from extended watranty contracts is initelly recorded as deforred income and subsequently recognized on a steatight ithe basis over the delivery period because the company is providing a service of standing teady to provide senvices over such term. Selected information related to warranties provided by IBM follows (in millions of US dollaref Required: 1. Compute the amount of warranty expense for 2017 and 2018. (Enter your answert in millions of dollari) 2. Prepare journal entries to record both the warranty expense for 2018 and the payments made under the warranty during the yeac. no entry is required for a transnction/event, select "No joumal entry required" In the first account field. Enter your answems in militions of dolitars.) Journal entry worksheet