Bridgeport Machinery Co$.$ manufactures equipment to a very high standard of quality; however, it must still provide a warranty for

each unit sold, and there are instances where the machines do require repair after they have been put into use. Bridgeport started in

business in $2023,$ and as the controller, you are trying to determine whether to use the assurance$-$type or service$-$type warranty

approach to measure the warranty obligation. You would like to show the company president how this choice would affect the

financial statements for $2023,$ and advise him of the better choice, keeping in mind that the service$-$type approach is consistent with

IFRS, and that there are plans to take Bridgeport public in a few years.

You have determined that sales on account for the year were $1,040$ units, with a selling price of $$2,700$ each. Ignore any cost of goods

sold. The warranty is for two years, and the estimated warranty cost averages $$180$ per machine. Actual costs of servicing warranties

for the year were $$112,320.$ You have done some research and determined that, if the service$-$type approach were to be used, the

portion of revenue allocated to the warranty portion of the sale would be $$340.$ Because the costs of servicing warranties are not

incurred evenly, warranty revenues are recognized based on the proportion of costs incurred out of the total estimated costs.

For the assurance$-$type approach, prepare the necessary journal entries to record all of the transactions described. Payments for

completed warranty repairs are paid in cash. $($Credit account titles are automatically indented when the amount is entered. Do not

indent manually. List all debit entries before credit entries. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the

amounts.$)$

Account Titles and Explanation

Debit

Credit

$($To record sales on account$)$

$($To record payment of warranty expense$)$

$($To accrue warranty expense$)$

Determine the warranty liability and expense amounts for $2023.$

Warranty liability