Sheridan Company sells automatic can openers under a $75-$day warranty for defective merchandise. Based on past experience,

Sheridan estimates that $4\%$ of the units sold will become defective during the warranty period. Management estimates that the

average cost of replacing or repairing a defective unit is $$15.$ The units sold and units defective that occurred during the last $2$ months

of $2022$ are as follows.

$($a$)$

Prepare the journal entry to record the costs incurred in honoring $1,026$ warranty claims. $($Assume actual costs of $$15,390.)$

$($Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$

Account Titles and Explanation

Debit

Credit

$($b$)$ Prepare the journal entry to record the warranty liability at December $31$ for the units sold in November and December. $($Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$

$($c$)$ Give the entry to record the honoring of $500$ warranty contracts in January at an average cost of $$15.($Credit account titles are automatically indented when amount is entered. Do not indent manually.$)$