Kirk Co Sells Goods to Customers with a Three-Year Warranty

Short Answer

Kirk Co. sells goods to customers with a three-year warranty. During 2012, Kirk sold $500,000 of goods. On December 31, 2012, Kirk made the appropriate year-end adjustment to record the warranty expense related to the goods sold during the year. During 2013, Kirk paid $400 cash to satisfy warranty claims. Show the effects of the 2013 payments to satisfy warranty claims.