On October 1, 2020 Sunland Company issued 6%, 10-year bonds with a face value of $5930000 at 104. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. The entry to record the issuance of the bonds would include a credit of $237200 to Premium on Bonds Payable. $177900 to Interest Payable. $237200 to Discount on Bonds Payable. $5692800 to Bonds Payable.

Right medical introduced a new implant that carries a five-year warranty against manufacturer’s defects. based on industry experience with similar product introductions, warranty costs are expected to approximate 2% of sales. sales were $8 million and actual warranty expenditures were $42,750 for the first year of selling the product. what amount (if any) should right report as a liability at the end of the year?