Exercise 1 Ajlouni Air Corporation sells central home air conditioning units under a 2-year warranty contract that requires the corporation to replace defective parts and to provide the necessary repair labor. During 2020, the corporation sells for cash 1,550 air conditioning units at a unit price of $4,210 (cost to Ajlouni equalled $3368). Based on past experience, the 2-year warranty costs are estimated to be $115 for parts and $165 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2020.) The warranty is not sold separately from the air conditioning units, and Ajlouni expects to incur 34%of the warranty expense in the first year. Instructions a. Record any necessary journal entries in 2020, applying the expense warranty accrual method. b. What liability relative to these transactions would appear on the December 31, 2020, balance sheet and how would it be classified if the expense warranty accrual method is applied? In 2021, the actual warranty costs to Ajlouni Air Corporation were $73,083 for parts and $102,300 for labor. C. Record any necessary journal entries in 2021, applying the expense warranty accrual method