On December 31, 2026, Dieker Company sells equipment to Tabor Inc. for $125,000. Dieker 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, 2026. Dieker estimates the prices to be $122,000 for the equipment and $3,000 for the cost of the warranty. In addition to the assurance warranty, Dieker sold an extended warranty (service type warranty) for an additional 2 years (20x2-20x3) for $2,000. Prepare the journal entry to record this transaction on December 31, 20x1.

On December 31, 2026, Dieker Company sells equipment to Tabor Inc. for $125,000. Dieker 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, 2026. Dieker estimates the prices to be $122,000 for the equipment and $3,000 for the cost of the warranty. In addition to the assurance warranty, Dieker sold an extended warranty (service type warranty) for an additional 2 years (20x2-20x3) for $2,000. Prepare the journal entry to record this transaction on December 31, 20x1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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