Early in 2020, Carla Equipment Company sold 500 Rollomatics at $6,100 each. During 2020, Carla spent $22,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. (a) Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be $30,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date [I Account Titles and Explanation Debit Credit 100
Early in 2020, Carla Equipment Company sold 500 Rollomatics at $6,100 each. During 2020, Carla spent $22,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis. (a) Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be $30,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date [I Account Titles and Explanation Debit Credit 100
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...
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![Early in 2020, Carla Equipment Company sold 500 Rollomatics at $6,100 each. During 2020, Carla spent $22,000 servicing the 2-year
assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis.
Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be
$30,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Date
10
Account Titles and Explanation
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1bc76a9a-f398-4c65-b601-6de3843cbce5%2Fc9731140-63e0-4a77-b921-b972189587e3%2F5jhbm6n_processed.png&w=3840&q=75)
Transcribed Image Text:Early in 2020, Carla Equipment Company sold 500 Rollomatics at $6,100 each. During 2020, Carla spent $22,000 servicing the 2-year
assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis.
Prepare 2020 entries for Carla. Assume that Carla estimates the total cost of servicing the warranties in the second year will be
$30,000. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Date
10
Account Titles and Explanation
Debit
Credit
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Follow-up Question
![Prepare 2020 entries for Carla assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume
that of the sales total, $53,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $22,000. Estimate
revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate
calculations to 5 decimal places, e.g. 1.54657 answers to O decimal places, e.g. 5,125. Record journal entries in the order presented in the
problem.)
Date
Account Titles and Explanation
Debit
Credit](https://content.bartleby.com/qna-images/question/1bc76a9a-f398-4c65-b601-6de3843cbce5/a0f5d329-22ca-4104-8fa6-1234d2841561/9imoue8_thumbnail.png)
Transcribed Image Text:Prepare 2020 entries for Carla assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume
that of the sales total, $53,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $22,000. Estimate
revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account titles and enter O for the
amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate
calculations to 5 decimal places, e.g. 1.54657 answers to O decimal places, e.g. 5,125. Record journal entries in the order presented in the
problem.)
Date
Account Titles and Explanation
Debit
Credit
Solution
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