Audio-Wave Company warrants its products for one year. The estimated product warranty is 2% of sales. Assume that sales were $85,000 for January. In February, a customer received warranty repairs requiring $210 of parts and $135 of labor.
a. Journalize the adjusting entry required at January 31, the end of the first month of the current year, to record the accrued product warranty.
b. Journalize the entry to record the warranty work provided in February.