Braden Bonnet Technologies manufactures sewing and pressing machines that are used in the manufacture of felt hats. Each machine sold includes a three-year limited warranty that guarantees repairs if the machine should fail. The warranty is an integral part of the sale price and is not considered a separate performance obligation. In 2021, 3,000 machines were sold at a price of $11,000 each. Based on past experience, the company has estimated that the expected value of the warranty repairs will be $600 per machine. Actual repair costs on the machines sold in 2021 were incurred as follows:

Year Costs Incurred

2021 $970,000

2022 $340,000

2023 $420,000

Required:

a. Prepare all the journal entries to record the sale and warranty transactions for 2021 to 2023.

b. Determine the warranty liability balance that will be reported at each year-end from 2021 to 2023.