Wet Rides guarantees its SeaDoos for three years. Company experience indicates that warranty costs will be approximately 4% of sales.

Assume that the Wet Rides dealer in Burlington made sales totaling $368,000 during 2020.

The company received cash for 22% of the sales and notes receivable for the remainder. Warranty payments totaled $8,000 during 2020.

1. Record the sales, warranty expense, and warranty payments for the company. Ignore cost of goods sold.

2. Post to the Estimated Warranty Payable T account. At the end of 2020, how much in Estimated Warranty Payable does the company owe?

Assume the Estimated Warranty Payable is $0 on January 1, 2020.