Sheffield Corporation sells DVD players. The corporation also offers its customers a $4-$year warranty contract. During $2020,$ Sheffield sold $20,000$ warranty contracts at $$132$ each. The corporation spent $$173,000$ servicing warranties during $2020,$ and it estimates that an additional $$865,000$ will be spent in the future to service the warranties.

Prepare Sheffield's journal entry for the sale of contracts. Assume the service costs are inventory costs. $($If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$

Account Titles and Explanation

Debit

Credit

eTextbook and Media

List of Accounts

Prepare Sheffield's journal entry for the cost of servicing the warranties. Assume the service costs are inventory costs. $($If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$