Torngat Computer Company sells computers $$2,000$ each, which includes a two$-$year that required the company to perform periodic services and to replace defective parts.

During $2024,$ Torngat sold $500$ computers on account and spent $$18,000$ servicing the two$-$year warranties that are included in each sale. All servicing transactions were paid in cash.

Required:

Ignore any cost of goods sold.

a$)$ Prepare the $2024$ entries for Torngat using the assurance$-$type approach for warranties. Assume that Torngat estimates that the total cost of servicing the warranties will be $$90,000$ for two years and payments for completed warranty repairs are paid in cash.

b$)$ Prepare the $2024$ entries for Torngat assuming that the warranty that recognize the sale of as a multiple deliverable with the warranty as a separate service that considered to be bundled with the selling price.

Warranty agreements similar to this are available separately, are estimated to have a stand$-$alone value of $$100,000,$ and are earned over the warranty period as follows: $2024,45\%$ and $2025,55\%.$