In 20X9, DEC Company introduced a new product which includes a 2-year warranty . During 20X9, the company sold 11,750 units of the product on account at unit price of $150. It is estimated that the expense associated with servicing the warranties will be $40 per unit in inventory costs. In 20X9, the company spent $100,000 servicing warranty claims.

Prepare the company's journal entries to record its sales and expenditures during 20X9, and the December 31, 20X9 adjusting entry.