On August 1, 2016, Pereira Corporation has sold, on account, 1,500 Wiglows to Mendez Company at $420 each. Mendez also purchased a 1-year service-type warranty on all the Wiglows for $10 per unit. In 2016. Pereira incurred warranty costs of $9,000. Costs for 2017 were $3,000. Required: 1. Prepare the joumal entries for the preceding transactions. 2. Show how Pereira would report the items on the December 31, 2016, balance sheet