On December 31, 2025, Sheridan Company sells production equipment to Golden Inc. for $82,500, Sheridan includes a 1-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2025, At December 31, 2025, Sheridan estimates that $1,700 of warranty costs will be incurred in the second year of the warranty. (a) Prepare the journal entry to record this transaction on December 31, 2025, (List all debit entries before credit entries. 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.)
On December 31, 2025, Sheridan Company sells production equipment to Golden Inc. for $82,500, Sheridan includes a 1-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2025, At December 31, 2025, Sheridan estimates that $1,700 of warranty costs will be incurred in the second year of the warranty. (a) Prepare the journal entry to record this transaction on December 31, 2025, (List all debit entries before credit entries. 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rahul
Transcribed Image Text:On December 31, 2025. Sheridan Company sells production equipment to Golden Inc. for $82,500. Sheridan includes a 1-year
assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31,
2025, At December 31, 2025, Sheridan estimates that $1,700 of warranty costs will be incurred in the second year of the warranty.
(a)
Prepare the journal entry to record this transaction on December 31, 2025. (List all debit entries before credit entries. 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.)
Account Titles and Explanation
Warranty Expense
Warranty Liability
Warranty Liability
Cash
Debit
Credit
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