Hanover Hats sells hats and offers a lifetime replacement warranty on all units sold, meaning any defective hats are replaced with a new one. The companys past experience shows that 2% of hats sold will be replaced under warranty. In 2020, Hanover's sold 3,400 hats at a price of $150 each. Each hat costs Hanovers $80 to produce. In 2020, 60 hats were replaced under warranty.

A. Prepare the journal entry to record the warranty expense for 2020 (use Dec 31, 2020 as a date)

B. Prepare the journal entry to record hats replaced under warranty for 2020 (use Dec 31, 2020)