Hitzu Co. sold a copier (that costs $6,500) for $13,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 5% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $138 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1? Warranty expense $ 650 2. How much is the estimated warranty liability for this copier as of December 31 of Year 1? Estimated warranty liability $ 650 3. How much is the estimated warranty liability for this copier as of December 31 of Year 2? Estimated warranty liability $ 512 4. Prepare journal entries to record (a) the copier's sale; (b) the adjustment to recognize the warranty expense on December 31 of Year 1; and (c) the repairs that occur on January 5 of Year 2. No General Journal Credit Date Aug 16 Debit 13,000 1 Cash Sales 13,000 2 Aug 16 6,500 Cost of goods sold Merchandise inventory 6,500 3 Dec 31 650 Warranty expense Estimated warranty liability