Early in 2020, Ivanhoe Equipment Company sold 500 Rollomatics at $6,500 each. During 2020, Ivanhoe...
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Accounting
Early in 2020, Ivanhoe Equipment Company sold 500 Rollomatics at $6,500 each. During 2020, Ivanhoe spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis.
a) Prepare 2020 entries for Ivanhoe. Assume that Ivanhoe estimates the total cost of servicing the warranties in the second year will be $40,000. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
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