Jupiter Corp. provides at no extra charge a two-year

Jupiter Corp. provides at no extra charge a two-year warranty with one of its products, which was first sold in 2011. In that year, Jupiter sold products for $2.5 million and spent $63,000 servicing warranty claims. At year end, Jupiter estimates that an additional $520,000 will be spent in the future to service warranty claims related to the 2011 sales.

Prepare Jupiter’s journal entry(ies) to record the sale of the products, the $63,000 expenditure, and the December 31 adjusting entry under the expense approach.

2011	Cash, A/R, etc..................	2,500,000
	Sales—Product..............		2,500,000
2011	Warranty Expense................	63,000
	Cash, Inventory, etc.......		63,000
12/31/11	Warranty Expense................	520,000
	Estimated Liability Under          Warranties.............		520,000