Background Information: Every new iPhone comes with a basic one-year warranty. If defects in materials or workmanship are discovered in one year from the date of retail purchase, Apple will repair or replace the iPhone at no cost to the customer. Recently, a batch of iPhone 6s devices was discovered to have a defect that causes them to shut down unexpectedly when the battery charge level reaches about 30%. Apple has issued a battery replacement program for these iPhone 6s devices.

My Question: When a customer brings in their iPhone 6s for a battery replacement under the battery replacement program, how is this transaction recorded and how does it impactApple's balance sheet and its income statement?