60.1K

Verified Solution

Link Copied!

Exercise 18-26 (Part Level Submission) On January 2, 2020, Sweet Company sells production equipment to Fargo Inc. for $45,000. Sweet includes a 2-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January 2, 2020. During 2020, Sweet incurs costs related to warranties of $880. At December 31, 2020, Sweet estimates that $620 of warranty costs will be incurred in the second year of the warranty. (a) Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020 (assuming financial statements are prepared on December 31, 2020). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020 During 2020 Dec. 31, 2020 SHOW LIST OF ACCOUNTS Accounts Receivable Accounts Receivable (Net) Advertising Expense Allowance for Sales Returns and Allowances Billings on Construction in Process Cash Cash, Labor, Parts Commission Expense Construction in Process Construction Expenses Cost of Goods Sold Cost of Installment Sales Deferred Gross Profit Delivery Expense Discount on Notes Receivable Estimated Inventory Returns Freight-Out Gain on Repossession Income Summary Installment Accounts Receivable Installment Sales Revenue Inventory Inventory on Consignment Loss from Long-Term Contracts Loss on Repossession Materials, Cash, Payables No Entry Notes Receivable Operating Expenses Parts Expense Purchases Realized Gross Profit Rent Revenue Repossessed Merchandise Retained Earnings Returned Inventory Revenue from Consignment Sales Revenue from Franchise Fees Revenue from Long-Term Contracts Sales Discounts Sales Discounts Forfeited Sales Returns and Allowances Sales Revenue Service Revenue Unearned Franchise Fees Unearned Sales Revenue Unearned Service Revenue Unearned Rent Revenue Unearned Warranty Revenue Warranty Expense Warranty Liability

Answer & Explanation Solved by verified expert

See Answer