M$-8$ Mechinery Comoration, a orivate company followine ASPE sold manufacturine equioment tor $$2\mathrm{.}500$ each. Each machine

MHB Machinery Corporation, a private company following ASPE sold manufacturing equipment for $$2,500$ each. Each machine

carried with it a two$-$year warranty against manufacturing defects. From experience, MHB Machinery Corporation determined that

carried with it a two$-$year warranty against manuracturine detects. From experience, MHB Machinery Corporation determined that

each machine sold would average $$300$ in replacement parts. In $2023,$ the company sold $1,000$ machines. Also, in $2023,$ the company

each machine sold would averaze ssuu in replacement parts. In $2023,$ the company sold $1,000$ machines. Also, in $2023,$ the compan

incurred $$125,000$ in total repair costs $($the cost of replacement parts from inventory$).$ MHB Machinery Corporation also sold an

extended warranty for its machines. For $$500,$ customers could purchase an extended warranty that extended the warranty on the

machine for an additional two years. $800$ of the customers that bought machines also purchased the extended warranty. Assume the

revenue is earned evenly over the two$-$year contract. Prepare the year$-$end adjusting entry at December $31,2025$ for the service$-$type warranties. $($Note: assume that the cost of

repairs has already been recorded during $2025.($Credit account titles are automatically indented when the amount is entered. Do not

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

amounts.$)$

Account Titles and Explanation

Debit

Credit