Eds Athletics sells bicycles and other sports and athletic equipment. Sales and expected warranty claims for the year are as follows:

Item	Unit Sales	Expected Warranty Claims	Cost per Claim
		for Warranty Period
Mountain bikes	300	3 claims per 100 sold	$30
Racing bikes	120	1 claims per 20 sold	75
Snowboards	650	2 claim per 100 sold	20

	Required:
1.	Prepare the entry to record warranty expense for Eds for the year.
2.	Conceptual Connection: Why does Eds have to record a liability for future warranty claims?