Novak Corporation sells home entertainment systems. The corporation also offers to sell its customers a two-year warranty contract as a separate service. During 2020, Novak sold 22,000 warranty contracts at $92 each. The corporation spent $160,000 servicing warranties during 2020, and it estimates that an additional $640,000 will be spent in the future to service the warranties. Novak recognizes warranty revenue based on the proportion of costs incurred out of total estimated costs. entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the Prepare Novak's journal entry for the sale of warranty contracts. (Credit account titles are automatically indented when the amount amounts.) Account Titles and Explanation Debit Credit Warranty Liability No Entry Cash Sales Revenue Materials, Cash, Payables Unearned Revenue Warranty Expense Warranty Revenue Prepare Novak's journal entry for the cost of servicing the warranties. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Materials, Cash, Payables No Entry Cash Warranty Liability Sales Revenue Warranty Expense Unearned Revenue Warranty Revenue Prepare Novak's journal entry for the recognition of warranty revenue under the revenue approach used for service-type warranties. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit No Entry Warranty Expense Sales Revenue Warranty Revenue Cash Materials, Cash, Payables Warranty Liability Unearned Revenue Attempts: 0 of 3 used Submit Answer Save for Later