Early in 2017, Sage Equipment Company sold 500 Rollomatics during 2017 at $5,900 each. During 2017, Sage spent $18,000 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis.

Prepare 2017 entries for Sage 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. Sage estimates the total cost of servicing the warranties will be $55,000 for 2 years. Estimate revenues to be recognized on a straight-line basis. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round intermediate calculations to 5 decimal places, e.g. 1.54657 answers to 0 decimal places, e.g. 5,125.)

Date At Sale During 2017 Dec. 31, 2017 Account Titles and Explanation To record warranty revenue Debit Credit