Concept 1 Office Products sells office electronics that carry a 60-day manufacturer's warranty. At the time of purchase, customers are offered the opportunity to also buy a 1-year or 2-year extended warranty for an additional charge.
Required:
1. Does the sale of the extended warranty represent a loss contingency?
2. Provide journal entries for the extended warranty sales and revenue recognition.

Question

Quizplus · Accepted Answer

The Answer of Concept 1 Office Products sells office electronics that carry a 60-day manufacturer's warranty. At the time of purchase, customers are offered the opportunity to also buy a 1-year or 2-year extended warranty for an additional charge.
Required:
1. Does the sale of the extended warranty represent a loss contingency?
2. Provide journal entries for the extended warranty sales and revenue recognition.

Concept 1 Office Products Sells Office Electronics That Carry a 60-Day