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Rudik [331]
3 years ago
14

Scout Company sold $15.000 of merchandise in September with a three-month warranty. The cost to repair defects under warranty is

estimated at 5% of the sales price. The journal entry to record the estimated warranty expense for the month of September will include a
a. debit to Product Warranty Expense for $750
b. credit to Product Warranty Expense for $750.
c. debit to Product Warranty Payable for $7,500.
d. credit to Product Warranty Payable for $7.500.
Business
1 answer:
chubhunter [2.5K]3 years ago
8 0

Answer: debit to Product Warranty Expense for $750

Explanation: 5% of $15000 =

5 ÷ 100 × $15000 is $750.

This is an expense and so will be a debit.

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