Shades For Days sells glasses and has a product warranty policy where defective glasses will be replaced free of charge for the life of the glasses. Shades for Days estimates that 2% of the pairs of glasses sold will require replacement. Each pair of glasses costs the business $40. In March 2021, Shades for days sold 1,300 pairs at $120 per pair.

Question: record the estimated warranty liability for March 2021.

Debit = Warranty Payable - 1,040, Warranty Expense - 1,300, Parts Inventory - 3,120, Warranty Expense - 1,040, Warranty Payable - 3,120, or Estimated Warranty Liability - 1,300

Credit = Warranty Payable - 1,040, Warranty Expense - 1,300, Parts Inventory - 3,120, Warranty Expense - 1,040, Warranty Payable - 3,120, or Estimated Warranty Liability - 1,300