I was given a Warranty provision question for my accounting class and wasn't sure how to tackle it. It's a 3 year warranty and given in it are 4 expected payouts for each year with the probability of each payout happening. It also gives how many units we have sold and the average price for the units. It also states that the effect of discounting is material and that the discount rate is 5%.

I need to complete the journal entries to record the provision, but I wasn't sure how to utilize the discount rate in the question.

Thank you for your time and help.