In $2015,$ the Magtag Company sold $16,000$ ovens. Magtag estimated that $14\%$ of the machines would require repairs under the two$-$year assurance$-$type warranty at an average cost of $$60.$ During $2015,$ Magtag had an actual outlay of $$62,000$ for repairs under warranty. Magtag uses the GAAP approach of accruing warranty expense $($and the related liability$)$ in the year of the sale.

Refer to Exhibit $9-2.$ At what amount should the company record warranty expense for $2015?$

a$.$

$$134,400$

b$.$

$$116,000$

c$.$

$$42,000$

d$.$

$$62,000$

Prepare the journal entries