OMA Electrics sells washing machine at an average price of RM1,200 and also offers to each customer a separate 3-year service type warranty contract for RM200 that requires the company to perform periodic services and to replace defective parts. During 2016, the company sold 500 washing machines and 450 warranty contracts. In 2017, OMA Electric incurred actual costs of RM13,000 servicing warranty claims.

REQUIRED:

1. Prepare necessary journal entries for OMA Electrics during year 2016.

2. Determine the above liability transactions that would appear on the statement of financial position as at 31 December 2016.

3. Prepare necessary journal entries for the washing machines warranty for OMA Electrics during year 2017.