Required information 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 $60. The company expects warranty costs to equal 9% of dollar sales. The following transactions occurred. November 11 Sold 60 razors for $3,600cash. 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 $10,800 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 $7,200 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. Problem 9-4 A (Algo) Part 1 Required: 1. Prepare journal entries to record above transactions and adjustments