The Case: Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are discovered in one year from the date of retail purchase, Apple will repair or replace the iPhone at no cost to the customer. Recently, a batch of iPhone 6s devices was discovered to have a defect that causes them to shut down unexpectedly when the battery charge level reaches about 30%. Apple has issued a battery replacement program for these iPhone 6s devices.

Question 1: How would a quarterly adjusting entry using the percent-of-sales method to estimate warranty expense for all new iPhones sold during the quarter affect Apple's balance sheet and income statement?

Question 2: is the adjusting entry for warranty expense an accrual or a deferral? (I think it is an accrual, but am not sure how to explain it)