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Question
Ecco Company sold $150,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 6% of the sales price. On October 15, a customer required a $200 part replacement, plus $85 labor under the warranty.
Journalize the entries for (a) the estimated expense on September 30 and (b) the October 15 warranty work.
Answer
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