Problem 8-79A (Algorithmic) Warranties Mason Auto Repair specializes in the repair of foreign car transmissions. To encourage business, Mason offers a 6-month warranty on all repairs. The following data are available for 2019: Transmissions repaired, 2019 Expected frequency of warranty claims 2,800 0.03 per repair Actual warranty claims, 2019 $20,200 Estimated warranty liability, 1/1/19 $16,100 Estimated cost of each warranty claim $220 Assume that warranty claims are paid in cash. Required: 1. Compute the warranty expense for 2019. $ 2. Prepare the entry to record the payment of the 2019 warranty claims. (Record payment of claims) 3. Conceptual Connection: What is the December 31, 2019, balance in the estimated warranty liability account? Why has the balance in the estimated warranty liability account changed from January 1, 2019? The balance has because more claims were than were through warranty expense.