Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $440,000. Actual warranty expenditures in January of the following year were $15,000 Required: 1. Does this situation represent a contingent liability? Yes or No Yes No Journal entry worksheet Record the contingent liability for warranties. Note: Enter debits before credits. Transaction General Journal Debit Credit Journal entry worksheet