ools sells power tools and backs each product it sellis with a one-year warranty against defects 8osed on previous experience, the company expects warranty costs to be Rotary Tools sells power tools a 5% of sales By the ond of the first year, sales are $800,000 Actual warranty expenses incurred so far 1. Does this situation represent a contingent liablity? Yes No 2. Record warranty expense and warranty lability for the year based account field.) on 5% of sales. (If no entry is required for a transaction(event, select "No journal entry required" in the firs t no entry is required for a transaction/event, select No ournal entry required in the ht 2. Record warranty expense and warranty iability for the year based on 5% of sales account field.) View transaction list Journal entry worksheet Record warranty expense and warranty liability for the year based on 5% of sales Note: Enter debits before oredas. Event General Journal Debit Credit Record entry Clear entry View general journal 3. Record the actual warranty expendtures of $10,000 incurred so far.(f no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the actual warranty expenditures of $10,000 incurred so far Note: Enter debits before credits. General Journal Debit Credit Record entry Clear entry View general journal 4. What is the balance in the Warranty Liability account after the entries in parts 2 and 3? arranty liability