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Sunnyvale Computer Company Sells a Line of Computers That Carry

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Essay

Sunnyvale Computer Company sells a line of computers that carry a 6-month warranty. Customers are offered the opportunity to buy a 2-year extended warranty for an additional charge. During 2009, Sunnyvale received $320,000 from customers for these extended warranties. All sales are on credit, and funds are received evenly throughout the year and the warranties go into effect immediately after purchase.
Required:
Prepare a summary journal entry to record sales of the extended warranties. Also prepare any other entries associated with the warranties that should be recorded during 2009.


Definitions:

Robert M. Yerkes

An American psychologist best known for his work in intelligence testing and comparative psychology.

Intelligence Test

A standardized assessment used to measure a person's cognitive abilities and potential in comparison to the population.

Eugene Debs

An American socialist, political activist, and trade unionist, best known for his role in organizing the American Railway Union and his five runs for U.S. president on the Socialist Party ticket.

Draft

A system of compulsory recruitment for military service, often utilized during times of war to raise armies.

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