Auto Partz, Inc. has recently introduced new magnetic brake rotors for use in high-end car models. It introduced the product sometime early in January 2018 and sold 300,000 units in the first year ending December 31. Each unit is sold for $500 and carries a two-year repair or replacement warranty. Warranties on similar products are available with competitors at $75 each. After some research, it was determined that 35% of the revenues would be recognized in the year of sale and the balance in the year following the sale. The company estimates its warranty expenses to be $25 per unit and has recorded $3 million as actual warranty costs in the first year.

Prepare the entries required, using the service-type approach, to record the transactions:

a] on the sales of the rotors in the first year (assume credit sales). 

b] for the warranty costs in the first year. 

c] adjustments at the end of the first year.