Cupola Awning Corporation introduced a new line of commercial awnings in 2021 that carry a two-year warranty against manufacturer's defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 2% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Actual Warranty Sales Expenditures $5,840,000 $42,500 Required: 1. Does this situation represent a loss contingency? 2. Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects of the warranty that should be recorded during 2021 3. What amount should Cupola report as a liability at December 31, 2021? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Does this situation represent a loss contingency? Lous contingency Required 2 > Required 1 Required 2 Required 3 Prepare journal entries that summarize sales of the awnings (assume all credit sales) and any aspects recorded during 2021. (If no entry is required for a transaction/event, select "No Journal entry require View transaction list Journal entry worksheet 1 2 3 Record the 2021 sales. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet Record the accrued liability and expense. Note: Enter debits before credits. Event General Journal Debit Credit 2 Record entry Clear entry View general journal Journal entry worksheet 12 3 > Record the actual expenditures. Note: Enter debits before credits. Event General Journal Debit Credit 3 Record entry Clear entry View general journal Required 1 Required 2 Required 3 What amount should Cupola report as a liability at December 31, 2021? Liability