Streep Factory provides a 2-year warranty with one of its products which was first sold in 2025. Streep sold $1,000,000 of products subject to the warranty. Streep expects $125,000 of warranty costs over the next 2 years. In 2025, Streep spent $70,000 servicing warranty claims. Prepare Streep’s journal entry to record the sales (ignore Cost of Goods Sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs.