Caldwell Industries sold $410,000 of consumer electronics during August under a nine month warranty. The cost to

Question:

Caldwell Industries sold $410,000 of consumer electronics during August under a nine month warranty. The cost to repair defects under the warranty is estimated at 4% of the sales price. On October 15, a customer was given $110 cash under terms of the warranty. Provide the journal entry for
(a) The estimated warranty expense on August 31 and
(b) The October 15 cash payment.