Sheridan Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Sheridan estimates that 4% of the units sold will become defective during the warranty period. Management estimates that the average cost of replacing or repairing a defective unit is $15. The units sold and units defective that occurred during the last 2 months of 2022 are as follows.

Month		Units Sold		Units Defective Prior to December 31
November		31,200		624
December		33,200		415

(a)

Prepare the journal entry to record the costs incurred in honoring 1,039 warranty claims. (Assume actual costs of $15,585.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
enter an account title to record honoring of warranty contracts	enter an account title	enter a credit amount
enter an account title to record honoring of warranty contracts	enter an account title	enter a credit amount

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(b)

Prepare the journal entry to record the warranty liability at December 31 for the units sold in November and December. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

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(c)

Give the entry to record the honoring of 500 warranty contracts in January at an average cost of $15. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount