Central Yard Equipment offers warranties on all its lawn mowers. It estimates warranty expense at 1.4 percent of sales. At the beginning of 2019, the Estimated Warranty Payable account had a credit balance of \(\$ 2,200\). During the year, Central Yard Equipment had \(\$ 580,000\) of sales and had to pay out \(\$ 8,750\) in warranty payments for repairs.

1. Prepare the required journal entries to record warranty expense and payments. Use December 31 for the journal entry date.

2. What is the balance of the warranty liability at the end of 2019? Indicate whether the balance is a debit or a credit.