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On January 2, 2017, Ayayai Company sells production equipment to Fargo Inc. for $55,000. Ayayai 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, 2017. During 2017, Ayayai incurs costs related to warranties of $850 (Use Parts Expense account). At December 31, 2017, Ayayai estimates that $630 of warranty costs will be incurred in the second year of the warranty.

Prepare the journal entry to record this transaction on January 2, 2017, and on December 31, 2017 (assuming financial statements are prepared on December 31, 2017). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2017During 2017Dec. 31, 2017 Jan. 2, 2017During 2017Dec. 31, 2017 Jan. 2, 2017During 2017Dec. 31, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT

Repeat the requirements for (a), assuming that in addition to the assurance warranty, Ayayai sold an extended warranty (service-type warranty) for an additional 2 years (20192020) for $800. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 2, 2017During 2017Dec. 31, 2017 Jan. 2, 2017During 2017Dec. 31, 2017 Jan. 2, 2017During 2017Dec. 31, 2017

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