During 2019, Baker Company sold 10,000 computers; customers…
During 2019, Baker Company sold 10,000 computers; customers have the option to purchase an extended 2-year warranty covering parts and service and 3,000 of their customers purchased the extended warranty. Baker Company recognizes the revenue for the extended warranty on a straight-line basis over the years covered. What is the impact to each of the financial statement categories below when Baker company recognizes the revenue in 2020 related to the extended warranty?