Early in 2020, Buffalo Equipment Company sold 600 Rollomatics at $5,700 each. During 2020, Buffalo spent $20,000 servicing the 2-year assurance warranties that accompany the Rollomatic. All sales transactions are on a cash basis.

Prepare 2020 entries for Buffalo assuming that the warranties are not an integral part of the sale (a service-type warranty). Assume that of the sales total, $58,000 relates to sales of warranty contracts.Warranty costs incurred in 2020 were $20,000. Estimate revenues to be recognized on a straight-line basis.