Waterway Factory provides a 2-year warranty with one of its products which was first sold in 2025. Waterway sold $1,073,800 of products subject to the warranty. Waterway expects $133,420 of warranty costs over the next 2 years. In that year, Waterway spent $76,060 servicing warranty claims. Prepare Waterway's journal entry to record sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures 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 no indent manually. List all debit entries before credit entries.

During 2025

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2.

(to record payment for warranty costs incurred).

1.

2.

(to record sales)

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2.