Question

Assume that during May, a company sold a product for $160,000 that includes a 36-month warranty. Historically, the average cost of repairs over the warranty period is 7% of the sales price. The entry to record the estimated product warranty expense would include a __________ to __________ for $11,200.
a. debit; Product Warranty Expense
b. credit; Cash
c. debit; Product Warranty Payable
d. credit; Product Warranty Expense

Answer 1

A. Debit; product warranty expense