Requirement -2 | Account titles and explanation | Debit | Credit | ||||||||||
1 | Cash | $444,000 | |||||||||||
deferred revenue - extended warranties | $444,000 | ||||||||||||
(cash received for extended warranties) | |||||||||||||
2 | Deferred revenue - extended warranties | $222,000 | (440,000/2) | ||||||||||
Revenue - extended warranties | $222,000 | ||||||||||||
(warranties income booked for year 1 based on straight line method) | |||||||||||||
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