Exercise 1- Accounting for warranty expense and warranty payable Toyota, the car manufacturer, guarantees its vehicles for three years or 100,000 kilometres, whichever comes first. Suppose Toyota's experience indicates that it can expect warranty costs to equal to 3% of sales. Assume that Thomson Toyota in Adelaide makes sales of Toyota Corollas totalling $500,000 during 2018, its first year of operations. The business receives cash for 30% of the sales and loans receivable for the remainder. Payments to satisfy customer warranty claims totalled $10,000 during 2018. (These payments are reimbursed by Toyota.) Required 1. Record the journal entries for sales, warranty expense and warranty payments for Thomson Toyota. 2. Post to the estimated warranty payable T-account. 3. At the end of 2018, how much in warranty costs does Thomson Toyota still expect to pay?