Account for the 2,200 contracts

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The Winimucca Supply Company sells maintenance contracts to the purchasers of the equipment they sell. The cost of the contract is $1,450, payable at the signing of the contract. The contract covers a three-year period with regularly scheduled inspection visits (every six months) plus any emergency visits. Experience shows that, on the average, one emergency visit per contract is required each year. Assume that 2,200 contracts were sold in 2011 and that contract sales were made evenly over the year.

Give the entries required for 2011 and 2012 to account for the 2,200 contracts.

Reference no: EM13148794

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