Early in 2020, Sage Equipment Company sold 600 Rollomatics at $5,500 each. During 2020, Sage...
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Accounting
Early in 2020, Sage Equipment Company sold 600 Rollomatics at $5,500 each. During 2020, Sage spent $19,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis.
Prepare 2020 entries for Sage assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $52,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $19,000. Estimate revenues to be recognized on a straight-line basis. (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. Round intermediate calculations to 5 decimal places, e.g. 1.54657 answers to 0 decimal places, e.g. 5,125. Record journal entries in the order presented in the problem.)
Format below:
Date Account Title (1) debit credit
Account Titlte (2) debit credit
Account Titlte (3) debit credit
Date Account Title (4) debit credit
Account Titlte (5) debit credit
Date Account Title (5) debit credit
Account Titlte (6) debit credit
(To record warranty revenue)
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