On October 29, Lobo Company 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 $16 and its retail selling price is $70. The company expects warranty costs to equal 5% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $4,200 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 12 razors that were returned under the warranty. December 16 December 29 December 31 Sold 180 razors for $12,600 cash. Replaced 24 razors that were returned under the warranty. Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 120 razors for $8,400 cash. January 17 Replaced 29 razors that were returned under the warranty. January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 11-4A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 12 9 < Prev 5 6 7 of 7 Next >