Question: 1. Paris Company offers an annual bonus to employees if the company meets certain net income goals. Prepare the journal entry to record a $10,000 bonus owed to its workers (to be shared equally) at calendar year-end.
2. A car is sold for $15,000 on June 1, 2011, with a one-year warranty on parts. Warranty expense is estimated at 1.5% of selling price at each calendar year-end. On March 1, 2012, the car is returned for warranty repairs costing $135. The amount recorded as warranty expense on March 1 is
(a) $0;
(b) $60;
(c) $75;
(d ) $135;
(e) $225.