On October 29, Lobo Co. began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $80. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred.

Nov.		11		Sold 60 razors for $4,800 cash.
		30		Recognized warranty expense related to November sales with an adjusting entry.
Dec.		9		Replaced 12 razors that were returned under the warranty.
		16		Sold 180 razors for $14,400 cash.
		29		Replaced 24 razors that were returned under the warranty.
		31		Recognized warranty expense related to December sales with an adjusting entry.
Jan.		5		Sold 120 razors for $9,600 cash.
		17		Replaced 29 razors that were returned under the warranty.
		31		Recognized warranty expense related to January sales with an adjusting entry.

Required: 1. Prepare journal entries to record above transactions and adjustments.