Hadley Industries Warrants Its Products for One Year

Essay

Hadley Industries warrants its products for one year. The estimated product warranty expense is 4% of sales. Assume that sales were $210,000 for June. In July, a customer received warranty repairs requiring $205 of parts and $75 of labor. (a) Journalize the adjusting entry required at June 30 , the end of the first month of the current year, to record the estimated product warranty expense.
(b) Journalize the entry to record the warranty work provided in July.