Problem 9-4A (Algo) Estimating warranty expense and liability LO P4 [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 $15 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred. Novenber 11 Sold 70 razors for $4,900 cash. November 30 Recognized warranty expense related to Novenber sales with an adjusting entry. Decenber 9 Replaced 14 razors that were returned under the warranty. December 16 Sold 210 razors for $14,780 cash. December 29 Replaced 28 razors that were returned under the warranty. Decenber 31 Recognized warranty expense related to December sales with an adjusting entry. January 5 Sold 140 razors for $9,800 cash. January 17 Replaced 33 razors that were returned under the warranty; January 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9.4A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments