Stone, Inc., sells its products with a one-year warranty. The estimated product warranty is 4% of sales. Assume that

Question

Stone, Inc., sells its products with a one-year warranty. The estimated product warranty is 4% of sales. Assume that Stone had sales of $172,000 during January this year. On February 25, a customer received warranty repairs requiring $64 of labor and $38 of parts. Required: Record the adjusting entry to accrue warranty expense on January 31. Record the journal entry for the warranty work provided in February. Account Title Debit Credit Problem 2 (8.5 points) Assume, that on March 8, 2021, Starbucks Corporation, borrowed $440 million cash from JP Morgan Chase to meet short-term obligations. Starbucks signed a 6% note and promised to repay the $440 million in 150 days. All interest will be paid when the note is due. Assume the company records only the two entries: borrowing and payment. Use 360-day year and round your answer to the nearest dollar. Required: Find the maturity date of the note. Maturity date is: Record the issuance of the note on March 8. Record payment of the note and

Help In Homework · Accepted Answer

1) Journal Entries: Date Account Title and Explanation Debit Credit Jan. 31 Warranty Expense ($172,000*4%) $6,880 Estimated Warranty Liability $6,880 (To record warranty expense accrued) Feb. 25 Estimated Warranty Liability $102 Cash / Wages Payable $64 Repairs Inventory 38 (To record warranty claim honored) 2) Journal Entries: Date Account Title and Explanations Debit (in millions) Credit (in millions) Mar. 8 Cash $440 Notes Payable $440 (To record short term note issued) Aug. 5 Notes Payable $440 Interest Expense $11 =440*6%*150/360 Cash $451 (To record note repaid with interest)

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Stone, Inc

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Date	Account Title and Explanation	Debit	Credit
Jan. 31	Warranty Expense ($172,000*4%)	$6,880
	Estimated Warranty Liability		$6,880
	(To record warranty expense accrued)

Feb. 25	Estimated Warranty Liability	$102
	Cash / Wages Payable		$64
	Repairs Inventory		38
	(To record warranty claim honored)

Date	Account Title and Explanations	Debit (in millions)	Credit (in millions)
Mar. 8	Cash	$440
	Notes Payable		$440
	(To record short term note issued)

Aug. 5	Notes Payable	$440
	Interest Expense	$11		=4406%150/360
	Cash		$451
	(To record note repaid with interest)