MYK Machinery Corporation, a private company following ASPE sold manufacturing equipment for $$2,400$ each. Each machine carried with it a two$-$year warranty against manufacturing defects. From experience, MYK Machinery Corporation determined that each machine sold would average $$281$ in replacement parts. In $2023,$ the company sold $1,000$ machines. Also, in $2023,$ the company incurred $$125,000$ in total repair costs $($the cost of replacement parts from inventory$).$ MYK Machinery Corporation also sold an extended warranty for its machines. For $$410,$ 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 journal entry to record the sale of the machines and extended warranties for cash. $($Ignore any cost of goods sold entry$).($Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. If no entry is required, select $"$No Entry" for the account titles and enter $O$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Question Part Score

$\frac{-}{3}$

Prepare the journal entry to record the warranty costs incurred during $2023.($Credit occount 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 $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Prepare the year$-$end adjusting entry at December $31,2023,$ for the assurance$-$type warranties assuming MYK$\text{'}$s year$-$end is December $31.($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

Question Part Score

$\frac{-}{2}$

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 $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit