Recording and Reporting Warranties During 2020, Ward Company introduced a new product carrying a three-year warranty against

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Question:

Recording and Reporting Warranties During 2020, Ward Company introduced a new product carrying a three-year warranty against defects, which has a separate purchase price. The company collected $20,000, and $35,000 for this extended warranty feature in the years 2020 and 2021, respectively. The company uses straight-line recognition of warranty revenue. The estimated warranty costs are 2% of sales within the first 12 months following the sale and 44 in the second 12 months following the sale. For simplification, assume that sales occurred at the first of the year. Sales and actual warranty expenditures for the years ended December 31, 2020 and 2021 are:

	Sales	Actual Warranty Expenditure
2020	$600,000	$9,000
2021	1,000,000	30,000
	1,600,000	39,000

a. Record the journal entries required for (1) the sale of the products and warranties on credit, (2) incurred warranty costs, and (3) recognition of warranty revenue for 2020 and 2021,

List multiple debits or credits (when applicable) in alphabetical order.

Round your answers to the nearest whole dollar.