Business, 19.02.2021 16:20 ykpwincess

On January 2, 2020, Riverbed Company sells production equipment to Fargo Inc. for $46,000. Riverbed 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, Riverbed incurs costs related to warranties of $900. At December 31, 2020, Riverbed estimates that $690 of warranty costs will be incurred in the second year of the warranty. Required:
a. Prepare the journal entry to record this transaction on January 2, 2020, and on December 31, 2020.
b. Repeat the requirements for (a), assuming that in addition to the assurance warranty.

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On January 2, 2020, Riverbed Company sells production equipment to Fargo Inc. for $46,000. Riverbed...

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