Ted Electronics Inc. offered a 12-month warranty on all its appliances. Ted Electronics Inc. estimates that one appliance of each 1,000 sold will require warranty service and that the average warranty claim will cost Ted $500.

Prepare the journal entry to recognize warranty expense and associated liability, assuming Ted Appliances Inc. sells 30,000 appliances during 2021, for which no warranty work has yet been performed.

Prepare the journal entry for warranty repairs, assuming that in January 2022, Ted Electronics Inc. sends $1,500 cash and parts costing $2,300, to its dealers for warranty repairs.