Cupola Awning Corporation introduced a new line of commercial awnings in 2024 that carry a two year warranty against manufacturer's defects. Based on their experience with prevlous product introductions, warranty costs are expected to approximate 39 of sales. Sales and actual warranty expenditures for the first year of selling the product were: Required: 1. Does this situation represent a loss contingency? 2. Prepare journal entries that summarize sales of the awnings (assume all ciedit sales) and any aspects of the watranty that should be recorded during 2024 . 3. What amount should Cupola report as a llability at December 31, 2024