Blue Corp provides a $3-$year warranty with one of its products which was first sold in $2020.$ Blue sold $$1,200,000$ such products. The company expects $$367,500$ of warranty costs. The actual warranty costs incurred in $2021$ was $$270,000.$ How much warranty expense did Blue recognize in $2021?$

$$122,500$

$$3,500$

$$0$

$$367,500$