Warranty sales - cost

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Posted on by Community Member

Dear Reader,

We have retail outlet for electronics product. We sell extended and accidental warranty to customers & have arrangement with an insurance company for covering it.

E.g. we sell insurance at 10% of goods value, we give 6% to insurance company out of it & keep 4% as our commission.

We have already set-up warranty sales as % of goods sales price. So selling unit is service item and has not cost.

Query: How can we define further that at any warranty sales transaction, automatic debit should go to warranty cost ledger and credit to insurance company account?

Thanks in advance.

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