Chapter 4
Current Liabilities
174
c) At the end of 2017, the company decided to decrease its estimated liability by the
remaining balance. Prepare a journal entry to record this transaction.
Date
Account Title and Explanation
Debit
Credit
AP-14A (
8
)
Shining Star Corporation provides its customers with an option to purchase a three-year
warranty on washing machines. On March 1, 2017, Shining Star received $30,000 cash from
customers who purchased the extended warranty for their washing machines.
Required
a) Prepare a journal entry to record the sale of extended warranty on March 1, 2017.
Date
Account Title and Explanation
Debit
Credit
b) Prepare the journal entry required on March 1, 2018.
Date
Account Title and Explanation
Debit
Credit
