Reference no: EM132886262

Problem 1 - Stone, Inc., sells its products with a one-year warranty. The estimated product warranty is 4% of sales. Assume that Stone had sales of $172,000 during January this year. On February 25, a customer received warranty repairs requiring $64 of labor and $38 of parts.

Required -

1. Record the adjusting entry to accrue warranty expense on January 31.

2. Record the journal entry for the warranty work provided in February.

Problem 2 - Assume, that on March 8, 2021, Starbucks Corporation, borrowed $440 million cash from JP Morgan Chase to meet short-term obligations. Starbucks signed a 6% note and promised to repay the $440 million in 150 days. All interest will be paid when the note is due. Assume the company records only the two entries: borrowing and payment. Use 360-day year and round your answer to the nearest dollar.

Required -

1. Find the maturity date of the note. Maturity date?

2. Record the issuance of the note on March 8.

3. Record payment of the note and interest at maturity.