Ollivanders Inc. sells wands and offers a lifetime replacement warranty on all units sold, meaning any defective wants are replaced with a new one. The companys past experience shows that 2% of wands sold will be replaced under warranty. In 2020, Ollivanders Inc. sold 3,400 wands at a price of $150 each. Each wand costs Ollivanders $80 to produce. In 2020, 60 wands were replaced under warranty.

Required:

1. Prepare the journal entry to record the warranty expense for 2020 (use Dec 31, 2020 as a date)

2. Prepare the journal entry to record wands replaced under warranty for 2020 (use Dec 31, 2020)