Assume the same information in Exercise 15-61, except that the warranty is for three years and has a separate purchase price. The company collected \(\$ 20,000\), and \(\$ 35,000\) for this extended warranty feature in the years 2020 and 2021, respectively. The company uses straight-line recognition of warranty revenue. For simplification, assume that sales occurred at the first of the year.

Required

a. Record the journal entries required for (1) the sale of the products and warranties, (2) incurred warranty costs, and (3) recognition of warranty revenue for 2020 and 2021.

b. What liability would be reported on the balance sheet at the end of 2020 and 2021?