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On October 1,2024, Benson Company sells 5,000 microwaves at an average price of $500. The...

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Accounting

On October 1,2024, Benson Company sells 5,000 microwaves at an average price of $500. The product includes a one-year warranty on parts. Based on past experience, it is expected that 2% will be defective, and that warranty repair costs will average $125per unit. In 2024, warranty contracts were honored on 40 units at a total cost of $5,000. Which of the following is the correct summary journal entry to record for the repairs?
Responses
Warranty Expense (Debit)5,000
Repair Parts Inventory (and/or Wages Payable)(Credit)5,000
Warranty Expense (Debit)5,000 Repair Parts Inventory (and/or Wages Payable)(Credit)5,000
Warranty Expense (Debit)5,000
Warranty Liability (Credit)5,000
Warranty Expense (Debit)5,000 Warranty Liability (Credit)5,000
Warranty Liability (Debit)5,000
Repair Parts Inventory (and/or Wages Payable)(Credit)5,000
Warranty Liability (Debit)5,000 Repair Parts Inventory (and/or Wages Payable)(Credit)5,000
Warranty Liability (Debit)5,000
Cash (Credit)5,000
Warranty Liability (Debit)5,000 Cash (Credit)5,000

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