SIAST Corporation has a December 31 year end. The company sells calculators and provides a lifetime warranty on their product. Using past experience they estimate that 2% of calculators sold will be returned for replacement. The replacement cost of one calculator is $25. During 2019 the total sales for SIAST Corporation was $650,000 or 13,000 calculators sold at $50 per unit. On January 10, 2020 thirty calculators were returned and replaced under the warranty.

REQUIRED:

1. Prepare the journal entry to record the estimated warranty for 2019 on December 31.

2. Prepare the journal entry to record the replacement of the calculators on January 10, 2020.