Axiom Manufacturing Company manufactures and distributes smal power tools. Axiom offers an assurance-type warranty that covers all repair costs, including parts and labor, for 2 years after the date of sale. During the current year, the company sold $8,500,000 in power tools to major retail stores. The company estimates that warranty costs will be 5% of sales. Axiom made no repairs in the year of the sale. However, during the following year, the company incurred $176,000 in actual warranty claims. The repair costs included $131,000 in parts and $45,000 in labor (unpaid). Prepare the journal entries necessary to record the assurance-type warranty in the year of the sale and the actual repairs incurred during the folowing year assuming that Axiom uses the accrual basis. (Record debits first, then credits. Exclude explanations from any journal entries.)