Question
During December, Vixen Company sells $ in merchandise that has a oneyear warranty. Warranty expense is estimated at of sales. On January of the following year, the merchandise requires repairs that are completed the same day. The repairs cost $ for materials taken from parts inventory. The entry to record the repairs that occur on January is:
Debit Estimated Warranty Liability $; credit Parts Inventory $
Debit Estimated Warranty Liability $; credit Warranty Expense $
Debit Warranty Expense $; credit Estimated Warranty Liability $
Debit Estimated Warranty Liability $; credit Parts Inventory $
Debit Warranty Expense $; credit Estimated Warranty Liability $
