Sarasota Corporation sells home entertainment systems. The corporation also offers to sell its customers a two$-$year warranty

contract as a separate service. During $2023,$ Sarasota sold $25,000$ warranty contracts at $$97$ each. The corporation spent $$150,000$

servicing warranties during $2023,$ and it estimates that an additional $$600,000$ will be spent in the future to service the warrantles.

Sarasota recognizes warranty revenue based on the proportion of costs incurred out of total estimated costs.

Prepare Sarasota's journal entry for the sale of warranty contracts. $($Credit account titles are automatically indented when the amount

is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select $"$No Entry" for the account titles and

enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit

Unearned Revenue

Prepare Sarasota'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. List debit entry before credit entry. If no entry is required, select $"$No Entry" for the account titles

and enter $0$ for the amounts.$)$

Account Titles and Explanation

Debit

Credit