Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $580,000. Actual warranty expenditures in January of the following year were $22,000. Required: 1. Record warranty expense and warranty liability for the month of December based on 4% of sales. 2. Record the payment of the actual warranty expenditures of $22,000 in January of the following year.

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.