Rotary Tools sells power tools and backs each product it sells with a one$-$year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately $5\%$ of sales. By the end of the first year, sales are $$900,000.$ Actual warranty expenses incurred so far are $$13,000.$

Required:

$1.$ Does this situation represent a contingent liability?

$2.$ & $3.$ Record the appropriate journal entries for the warranties.

$4.$ What is the ending balance in the Warranty Liability account after the entries in parts $2$ and $3?$