On August 31, 2020, Rainy Day Technologies Inc. (Rainy) began selling a new satellite phone

called "Vanilla" that is the size and thickness of a credit card. The expensive advertising

campaign boasted a one-year warranty period that features a new replacement phone. The

engineering department estimates that 10% of the units sold may have to be replaced during

the warranty period. Sales to December 31, 2020 are 100,000 units at a price of $325 per unit.

The cost of the units is $150. 2500 have been replaced 2021. The company's year end is

December 31st.

A.) Prepare all the journal entries for the warranty that should be recorded.