Iknewit Company had sales of 360,000 units of its best-selling product during the Christmas season of 2021. The product is warranted for 1 year with expected warranty returns of 2.5% of units sold. Average warranty repair cost is $112 with that cost, on average, made up of 75% labor and 25% parts.

(a) Journalize the entry to record the adjustment required on December 31st, 2021 to properly accrue warranty liability.

(b) The first warranty work unit is returned on January 7th, 2022 and it costs $168 to make the repair. Journalize the entry required to record this individual repair.