3. A customer brings in a snowmobile for warranty repairs on January 15 of the following year and the replacement parts cost $700. Record the journal entry for this repair.

The journal entry is shown below:

Warranty expense liability A/c Dr $700

To Inventory A/c $700

(Being the replacement is recorded)

For recording this given transaction, we debited the warranty expense liability for $700 and credited the inventory account for $700 so that the proper posting could be done to their respective accounts