King Sales sells a certain product for $20,000. Included in this price is an implied service-type warranty of $600. Fifty machines were sold in 2016. Warranty expense incurred during 2016 amounted to $35,000. Which of the following entries would King Sales probably not make in 2016?
A. ?Unearned Warranty Revenue 35,000 Warranty Revenue 35,000
B. ?Cash 1,000,000 Sales 970,000 Unearned Warranty Revenue 30,000
C. ?Cash 30,000 Warranty Revenue 30,000
D. ?Warranty Expense 35,000 Cash (or other assets) 35,000
Answer: C
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