On January $2,2020,$ Wildhorse Company sells production equipment to Fargo Inc. for $$48,000.$ Wildhorse includes a $2-$year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on January $2,2020.$ During $2020,$ Wildhorse incurs costs related to warranties of $$870.$ At December $31,2020,$ Wildhorse estimates that $$620$ of warranty costs will be incurred in the second year of the warranty.

Prepare the journal entry to record this transaction on January $2,2020,$ and on December $31,2020($assuming financial statements are prepared on December $31,2020).($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 $0$ for the amounts.$)$

Date

Account Titles and Explanation

Debit

Credit