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prepare journal entries Let us assume that a dealer sells a car for $16,000 on December 1, 2019. The warranty is for one year or

prepare journal entries
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Let us assume that a dealer sells a car for $16,000 on December 1, 2019. The warranty is for one year or 12,000 mile covering parts. Experience shows that 4% of a car's selling price goes for covering warranties. In this case, 4% means $640. What should be the entries for Warranty expenses when the car is sold

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