Problem $9-4$A $($Algo$)$ Estimating warranty expense and liability LO P$4$

$[$The following information applies to the questions displayed below.$]$

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 $$13$ and its retail selling price is $$90.$ The company expects warranty costs to equal $7\%$ of

dollar sales. The following transactions occurred.

Problem $9-4$A $($Algo$)$ Part $1$

Required:

Prepare journal entries to record above transactions and adjustments.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

$7$

$8$

dots..,$12$

Record the replacement of $24$ razors that were returned under the warranty.

Note: Enter debits before credits.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 $$13$ and its retail selling price is $$90.$ The company expects warranty costs to equal $7\%$ of dollar sales. The following transactions occurred.

November $11$ Sold $60$ razors for $$5,400$ 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 $16$ Sold $180$ razors for $$16,200$ cash.

December $29$ Replaced $24$ razors that were returned under the warranty.

December $31$ Recognized warranty expense related to December sales with an adjusting entry.

January $5$ Sold $120$ razors for $$10,800$ 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.