Jonus Bike Inc., manufactures and sells high-end bicycles. Each bicycle that the company sells comes with a 5 year unlimited warranty. Based on past experience, Jonus' accountant estimates that for...

Jonus Bike Inc., manufactures and sells high-end bicycles. Each bicycle that the company sells comes with a 5 year unlimited warranty. Based on past experience, Jonus' accountant estimates that for every $3,000 worth of sales, Jonus will have to pay out $78 in warranty costs.

Do not enter dollar signs or commas in the input boxes.


a) This year, Jonus Bike Inc. had sales of $1,080,000. First, calculate the estimated warranty costs based on the accountant's analysis.

b) As part of the warranty program, Jonus had to make repairs to the seat post of 21 bicycles that he sold. Jonus spent $1,390 cash. Prepare the journal entry to record this transaction.