Question

Exercise 18-26 (Part Level Submission) On January 2, 2020, Coronado Company sells production equipment to Fargo Inc. for $54,000. Coronado 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, Coronado incurs costs related to warranties of $930. At December 31, 2020, Coronado estimates that $650 of warranty costs will be incurred in the second year of the warranty. (a) Your answer is partially correct. Try again. 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 T Cash Sales Revenue 54000 TDuring 2020 TWarranty Expense 9301 I Parts Expense 930 TDec. 31, 2020 Warranty Expense | Warranty Liability 650

Answer 1

solution Date particulars Debit Gedet Jan 2 2020 Cash 54000 sales Revenue Биоор Bec 31 930 warranty expense To cash alc 930 Dec 31 2020 650 warranty expense warranty leability 650