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today we will be going over recording actual warranty costs after the estimation of warranty is complete we still have to record the actual warranty cost in that estimation we just put it into a warranty payable warranty cost includes the amount of money spent on replacing the defective products the warranty cost journal entry is a debit to warranty payable because we are taking out that estimation and we are crediting inventory because we have to replace the defective inventory the warranty cost journal entry for repairment rather than replacement of the product would include again a debit to warranty payable and a credit to cash because we would be paying somebody to fix the product in this example bella beauty made one hundred thousand dollars in sales revenue this year they had to replace inventory of four thousand dollars due to it being defective what is the journal entry to record the inventory replacement we would debit warranty payable of four thousand and credit inventory of