On January 2, 2020, Skysong Company sells production equipment to Fargo Inc. for $46,000. Skysong 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 , Skysong incurs costs related to warranties of $880. At December 31,2020 , Skysong estimates that $650 of warranty costs will be incurred in the second year of the warranty. On January 2, 2020, Skysong Company sells production equipment to Fargo Inc. for $46,000. Skysong 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 , Skysong incurs costs related to warranties of $880. At December 31,2020 , Skysong estimates that $650 of warranty costs will be incurred in the second year of the warranty