Eric's Electronics sells computer parts. The company is required to warranty its products for 90 days. Historical Data indicates that 4% of monthly sales result in warranty claims. The monthly sales for February were $567,550.
The following warranty claims were made against the February sales.
3/10 $75
3/13 $145
3/15 $222
3/18 $108
3/21 $119
3/24 $281
3/27 $101
3/29 $41
3/31 $588
4/01 $66
4/04 $218
4/08 $951
4/15 $1040
4/17 $71
4/19 $822
4/23 $403
4/27 $52
4/28 $373
4/29 $169
5/02 $600
5/05 $2775
5/09 $313
5/12 $781
5/14 $385
5/16 $488
5/20 $1089
5/24 $966
5/26 $509
5/28 $776
5/29 $182
5/30 $426
5/31 $600
6/01 $1006
6/04 $2611
6/10 $490
6/15 $745
6/20 $38
6/21 $1245
6/25 $949
6/27 $800
6/28 $459
6/29 $530
6/30 $295
7/01 $1267
Prepare the journal entries to create and close the warranty period for the contingent liability due to sales from February.
Post claims to the appropriate T-accounts to illustrate the journal entries.