Solo Electronics Co$.$ includes a $3-$month assurance warranty service with the sale of each of its products. The company also offers

extended warranties. On June $30,20$X$1,$ Solo sold a sound system with a cost of $$4,000$ and a selling price of $$7,500$ to Beanstalk

Theater. The customer received and paid for the equipment on July $1,20$X$1.$ Solo estimates the price of the equipment at $$7,000$ and

at $$500$ for the warranty. Beanstalk paid an additional $$2,000$ to purchase an extended warranty which covers the equipment for an

additional $2$ years.

If Solo records unearned warranty revenue at the time of the sale, the adjusting joumal at December $31,20$X$1$ will be

Debit Warranty Liability, $$500$; Credit Warranty Revenue, $$500$

Debit Unearned Warranty Revenue, $$500$; Credit Warranty Revenue, $$500$

Debit Warranty Expense, $$1,500$; Credit Warranty Liability. $$1,500$

Debit Unearned Warranty Revenue, $$1,000$; Credit Warranty Revenue, $$1,000$

Attempts: $0$ of $1$ used