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AAA Co. sells equipment that includes a three-year warranty, Repairs under the warranty are performed by an independent service company under contract with AAA. Based

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AAA Co. sells equipment that includes a three-year warranty, Repairs under the warranty are performed by an independent service company under contract with AAA. Based on prior experience, warranty costs are estimated to be $25 per item sold. AAA sold 250 equipment at $500 each, plus 10.5 sales tax. Equipment that needed repair amounted to 100 equipment. Instructions: Prepared the necessary journal entries for 2021

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