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Chapter 8: Horizon sells new cell phones that they warranty against defects for one year. Horizon estimates 3% of Sales will be the cost of making good on the warranty. Horizon sales for the year is estimated to be $500,000. During the year, Horizon paid $5,000 to fix the bad cell phones under the warranty agreement. Prepare the entry to record the estimated expense of the warranty. Check: Warranty expense will be $15,000