In 2020, Hydrogen Corp. began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:

First year of warranty 2%

Second year of warranty 5%

Sales and actual warranty expenditures for 2020 and 2021 are presented below:

2020 2021

Sales $ 450,000 $ 600,000

Actual warranty expenditures 15,000 30,000

Hydrogen uses the expense approach to account for warranties.

Provide the journal entries for 2020 relating to the above transactions.