Prepare all journal entries related to the warranty

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Problem 1: Red Corporation started its business in 2020 and sold appliances worth $319,000 in 2020. The company provided a 2- year limited warranty for all sales. As per company estimate warranty costs would be 2% of sales in the first year and 3.5% of sales in the second year. By end of 2020 Red Corporation had already spent $1,870 on warranty repairs. Prepare all journal entries related to the warranty for 2020. Also Calculate the amount of Estimated Warranty Payable to be reported on the Balance Sheet on Dec 31, 2020

Reference no: EM132992449

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