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The eagle eyes sells eyewear with a one-year warranty. Customers may purchase an extended one year warranty. During 20X7, the company sold 52,000...

The eagle eyes sells eyewear with a one-year warranty. Customers may purchase an extended one year warranty. During 20X7, the company sold 52,000 pairs of eyeglasses for $1 million. Customers who purchased 75% of those pairs also purchased the one year extended warranty. This brought in $200,000 in cash.

a.) Record the sale of the extended warranty in 20X7.

b.) Assume during 20X9, the company spent $34K to repair glasses under the extended warranty. Record this entry.

c.) Record the entry eagle eyes will make when the extended warranties expire.

Top Answer

a) Debit: Cash Account $200,000 Credit: Unearned revenue account $ 200,000... View the full answer

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