Dave's Boats guarantees its boats for three years or 1,500 hours, whichever comes first. Industry experience indicates that Dave's can expect warranty costs will equal 10 percent of sales. Assume in its first year, Dave's Boats had sales totaling $473,000, receiving cash for 55 percent receivable for the remainder. Warranty payments totaled $23,600 during the year. Read the requirements Requirement 1. Record the sales, warranty expense, and warranty payments for Dave's Boats. Ignore cost of goods sold. (Record debits first, then credits. Exclude explanations from any journal entries.) Start by recording the sales. Journal Entry Credit Date Accounts Debit Next, record the warranty expense. Journal Entry Debit Credit Date Accounts Now record the warranty payments. Journal Entry Credit Date Accounts Debit Requirement 2. Post relevant portions of the journal entries to the Estimated warranty payable T-account. At the end of the first year, how much in estimated warranty payable does Dave's owe its customers? Post the relevant journal entries from Requirement 1 to the Estimated warranty payable T-account and calculate the ending balance of the account to determine the amount that Dave's owes its customers. Estimated warranty payable Requirement 3. What amount of warranty expense will Dave's report during its first year of operations? during its first year of operations. Dave's will report warranty expense of S Does the warranty expense for the year equal the year's cash payments for warranties? The warranty expense for the year the year's cash payments for warranties. Which accounting principle addresses this situation? The accounting principle which addresses this situation is the