6. Landcaster Inc. sells its products with a two-year service type warranty. On January 1,...
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6. Landcaster Inc. sells its products with a two-year service type warranty. On January 1, year one, Lancaster South 60 machines for $2500 each, on account Lancaster determines that the machines normally sell for $2275 each and the service type warranty could be purchased for $225 per machine. In year one, Lancaster pays $5000 for warrantee costs.
Required
Prepare Lancasters journal entry is related to the sales and warrantee in year one.
Prepare the necessary journal entries to record:
1. The sale of 60 machines on account on January 1
2. The warranty costs paid during that year
3. The warrantee revenue earned in year one
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