HW$17-4$

ABC manufactures and sells computers that include an assurance type warranty for the first $90$ days. ABC offers an optional extended coverage plan under which it will repair or replace any defective part for $3$ years from the expiration of the assurance type warranty. Because the optional extended coverage plan is sold separately, ABC determines that the $3$ years of extended coverage represents a separate performance obligation. The total transaction price for the sale of a computer and the extended warranty is $$5,300$ on August $1,2024$ and ABC determines the standalone selling price of each is $$4,300$ and $$1,000,$ respectively. Further ABC estimates it will incur $$550$ in costs to repair defects that arise within the $90$ day coverage period. The cost of the equipment is $$2,800.$ Assume that the $$550$ in costs to repair defects in the computers occurred on August $24,2024.$ Prepare the entries to record the transactions for $2024$ and $2025$ :