Maxwell Inc. offers an extended warranty for its products that cover 2 to 3 years after the sale. In 2020, total extended warranty sales amounted to $670,000 paid for in cash. The actual costs related to extended warranties in 2020 were $360,000. The unearned warranty revenues had a beginning balance of $120,000. Maxwell estimates that 54% of the total unearned warranty will be earned by the end of 2020.
Record all the journal entries related to the extended warranties in 2020.