How to Record Estimated Warranty Expense in Accounting?

Journal Entry for Estimated Warranty Expense

To record the estimated warranty expense for the month of September, the journal entry will include a:

Debit to Product Warranty Expense for $750

Explanation: 5% of $15,000 = 5 ÷ 100 × $15,000 is $750. This amount represents the cost to repair defects under warranty.

This expense account is increased with a debit entry.