On January 2, 2020, Crane Company sells production equipment to Fargo Inc. for $46,000. Crane 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, Crane incurs costs related to warranties of $930. At December 31, 2020, Crane estimates that $620 of warranty costs will be incurred in the second year of the warranty. 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020During 2020Dec. 31, 2020 Jan. 2, 2020During 2020Dec. 31, 2020 Jan. 2, 2020During 2020Dec. 31, 2020
On January 2, 2020, Crane Company sells production equipment to Fargo Inc. for $46,000. Crane 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, Crane incurs costs related to warranties of $930. At December 31, 2020, Crane estimates that $620 of warranty costs will be incurred in the second year of the warranty. 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 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2020During 2020Dec. 31, 2020 Jan. 2, 2020During 2020Dec. 31, 2020 Jan. 2, 2020During 2020Dec. 31, 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 2, 2020, Crane Company sells production equipment to Fargo Inc. for $46,000. Crane 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, Crane incurs costs related to warranties of $930. At December 31, 2020, Crane estimates that $620 of warranty costs will be incurred in the second year of the warranty.
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 0 for the amounts.)
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| Jan. 2, 2020During 2020Dec. 31, 2020 |
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| Jan. 2, 2020During 2020Dec. 31, 2020 |
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