Reference no: EM132550267

Question - Pronghorn Factory provides a 2-year warranty with one of its products which was first sold in 2017. Pronghorn sold $976,100 of products subject to the warranty. Pronghorn expects $119,940 of warranty costs over the next 2 years. In that year, Pronghorn spent $64,080 servicing warranty claims. Prepare Pronghorn's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.