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

$30,000\mathrm{.}00$

$$

Product Warranty Payable

$30,000\mathrm{.}00$

$$

Points:

$4\mathrm{.}2/5$

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

$205\mathrm{.}00$

$$

Wages Payable

$65\mathrm{.}00$

$$

Supplies

$140\mathrm{.}00$

$$

Points:

$5\mathrm{.}86/7$

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.