Safe-Loc Security Door Corp. introduced a new line of commercial security doors in 2016 that carry a four-year warranty against manufacturers defects. Based on their experience with previous product introductions, warranty costs are expected to approximate 4% of sales. Sales and actual warranty expenditures for the first year of selling the product were: Does this situation represent a loss contingency? Why or why not? How should it be accounted for? Prepare journal entries that summarize sales of the security doors (assume all credit sales) and any aspects of the warranty that should be recorded during 2016. What amount should Safe-Loc report as a liability at December 31, 2016