Ting Manufacturing sells its products with a 75-day warranty for defective merchandise. Based on past experience, Ting estimates that 3% 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 NT$15 (amounts in thousands). The units sold and units defective that occurred during the last 2 months of 2020 are as follows.

Instructions
a. Prepare the journal entries to record the provision for warranties and the costs incurred in honoring 1,000 warranty claims. (Assume actual costs of NT$15,000.)
b. Determine the estimated warranty liability at December 31 for the units sold in November and December.
c. Give the entry to record the honoring of 500 warranty contracts in January at an average cost of NT$15.

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Units Units Defective Prior to December 31 Month Sold November December 600 30,000 32,000 400