On January 2, 2025, Pharoah Company sells production equipment to Coronado Inc. for $52,000. Pharoah 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, 2025. During 2025, Pharoah incurs costs related to warranties of $890. At December 31, 2025, Pharoah estimates that $640 of warranty costs will be incurred in the second year of the warranty. (b) Repeat the requirements for (a), assuming that in addition to the assurance warranty. Pharoah sold Coronado an extended warranty (service-type warranty) for an additional 2 years (2027-2028) for $780. (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 O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) (a) Prepare the journal entry to record this transaction on January 2, 2025, and on December 31, 2025 (assuming financial statements are prepared on December 31, 2025). (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 O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Cri Date Account Titles and Explanation Debit Cri
On January 2, 2025, Pharoah Company sells production equipment to Coronado Inc. for $52,000. Pharoah 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, 2025. During 2025, Pharoah incurs costs related to warranties of $890. At December 31, 2025, Pharoah estimates that $640 of warranty costs will be incurred in the second year of the warranty. (b) Repeat the requirements for (a), assuming that in addition to the assurance warranty. Pharoah sold Coronado an extended warranty (service-type warranty) for an additional 2 years (2027-2028) for $780. (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 O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) (a) Prepare the journal entry to record this transaction on January 2, 2025, and on December 31, 2025 (assuming financial statements are prepared on December 31, 2025). (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 O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Cri Date Account Titles and Explanation Debit Cri
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
answer in proper format or skip answer with explanation , computation , narrations for each entry /parts answer in text form
Transcribed Image Text:On January 2, 2025, Pharoah Company sells production equipment to Coronado Inc. for $52,000. Pharoah 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, 2025.
During 2025, Pharoah incurs costs related to warranties of $890. At December 31, 2025, Pharoah estimates that $640 of warranty
costs will be incurred in the second year of the warranty.
(b)
Repeat the requirements for (a), assuming that in addition to the assurance warranty. Pharoah sold Coronado an extended
warranty (service-type warranty) for an additional 2 years (2027-2028) for $780. (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 O for the
amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
(a)
Prepare the journal entry to record this transaction on January 2, 2025, and on December 31, 2025 (assuming financial
statements are prepared on December 31, 2025). (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 O for the amounts. List all debit entries before
credit entries. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Cri
Date
Account Titles and Explanation
Debit
Cri
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