Question - Windsor Corp. manufactures a wide range of equipment. The company's biggest seller is the Whatchamacallit, which sells for $4,510 each. Each Whatchamacallit carries with it a 2-year warranty against manufacturing defects. In addition to this warranty, customers can purchase an optional extended warranty for $1,670 extra that extends the Whatchamacallit's warranty an additional 2 years. From experience, Windsor Corp. has determined that each Whatchamacallit sold will average $970 in replacement parts (ignore labour costs for repairs). In 2017, the company sells 620 Whatchamacallits; 280 of these customers decide to purchase the optional extended warranty. Also in 2017, the company incurred $275,700 in total repair costs (replacement parts out of inventory).
What is the journal entry to record the sale of the Whatchamacallits and the extended warranties (sales would take place throughout the year; prepare only one entry at December 31, 2017 for the total sales).