New Age Computers manufactures and sells pagers and radio paging systems which include a 180 day warranty on product defects. It also sells an extended warranty which provides an additional two years of protection. On May 10, it sold a paging system for $3,850 and an extended warranty for another $1,200. The journal entry to record this transaction would include:
a) a credit to Service Revenue of $5,050.
b) a credit to Service Revenue of $1,200.
c) a credit to Sales of $3,850 and a credit to Service Revenue of $1,200
d) a credit to Unearned Service Revenue of $1,200
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