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 2020 are as follows. Month November December Units Sold 30,800 32,800 Units Defective Prior to December 31 616 410 Your answer is partially correct. Try again. 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.) Account Titles and Explanation Debit Credit Warranty Liability 15390 Cash U 15390 15390