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 $14 and its retail selling price is $70. The company expects warranty costs to equal 7% of dollar sales. The following transactions occurred. November 11 Sold 50 razors for $3,500 cash. November 30 Recognized warranty expense related to November sales with an adjusting entry. December 9 Replaced 10 razors that were returned under the warranty. December 16 Sold 150 razors for $10,500 cash. December 29 Replaced 20 razors that were returned under the warranty. December 31 Recognized warranty expense re