Answer:
The responses to these question can be defined as follows:
Explanation:
In question 1:
YES, the guarantee expense is an obligation.
In question 4:
Journal entries:
Date Title of Account Dr Cr
31-Dec expense Warranty 18400
Estimated liability Warranty 18400
31-Jan Estimated liability Warranty 16000
Cash 16000
Balance on Warranty Liability:
Part -2 31-Dec Approximate amount of guarantee liability: $ 18400
Part-3 31-Jan Approximate amount of guarantee liability: $ 2400
