E$13\mathrm{.}11($LO$3)($Warranties$)$Early

in $2020,$Crow Equipment sold $500$ Rollomatics at $$6,000$ each.

During $2020,$ Crow spent $$20,000$ servicing the $2-$year assurance

warranties that accompany the Rollomatic. All applicable

transactions are on a cash basis.Instructionsa.$$Prepare $2020$ entries for

Crow. Assume that Crow estimates the total cost of servicing the

warranties in the second year will be $$35,000.$b$.$Prepare $2020$ entries for

Crow assuming that the warranties are not an integral part of the

sale $($a service$-$type warranty$).$ Assume that of the sales total,

$$56,000$ relates to sales of warranty contracts. Warranty costs

incurred in $2020$ were $$20,000.$ Estimate revenues to be recognized

on a straight$-$line basis.