Catskills Connectors sell industrial equipment to an array of business and suppliers. Catskills Connectors provides a guarantee on its equipment for 3 years.

Company experience indicates that 8% of sales will require warranty service.

An Albany area dealer made sales during 2020 totaling $740,000.

The company received cash for 11% of the sales and notes receivable for the remainder.

Warranty payments for 2020 totaled $30,000, of which wages accounted for 82% of the costs and supplies for the remainder.

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 $1,900 on January 1, 2020.