Bramble Corporation sells home entertainment systems. The corporation also offers to sell its customers a two-year warranty contract as a separate service. During 2020, Bramble sold 21,000 warranty contracts at $ 92 each. The corporation spent $ 180,000 servicing warranties during 2020, and it estimates that an additional $ 720,000 will be spent in the future to service the warranties. Bramble recognizes warranty revenue based on the proportion of costs incurred out of total estimated costs.

1. Prepare Brambles journal entry for the sale of warranty contracts.

2. Prepare Brambles journal entry for the cost of servicing the warranties.

3. Prepare Brambles journal entry for the recognition of warranty revenue under the revenue approach used for service-type warranties.