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Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the company to replace all defective parts and to provide the repair labor at no cost to the customers. With sales being made evenly throughout the year, the company sells 600 machines in 2020 (warranty expense is incurred half in 2020 and half in 2021). As a result of product testing, the company estimates that the total warranty cost is $390 per machine ($170 parts and $220 labor). Instructions Assuming that actual warranty costs are incurred exactly as estimated, what journal entries would be made relative to the following facts
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Alvarado Company sells a machine for $7,400 with a 12-month warranty agreement that requires the com...
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