Riverbed Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract....
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Riverbed Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Riverbed sold 20,000 warranty contracts at $96 each. The corporation spent $187,000 servicing warranties during 2020, and it estimates that an additional $935,000 will be spent in the future to service the warranties.
Prepare Riverbeds journal entry for the recognition of warranty revenue. Assume the service costs are inventory costs.
| Unearned Warranty Revenue | ||
| Warranty Revenue |
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