Required information Problem 9.4A Estimating warranty expense and liability LO P4 The following information applies to the questions displayed below) On October 29, Lobo Co began operations by purchasing razors for resale. The razors have a 90-day warranty. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $20 and its retail selling price is $75. The company expects warranty costs to equal 8% of dollar sales. The following transactions occurred, Nov. 11 Sold 105 razors for $7,875 cash. 30 Recognized warranty expense related to November sales with an adjusting entry. Dec. 9 Replaced 15 razors that were returned under the warranty. 16 Sold 22e razors for $16,5ee cash. 29 Replaced 38 razors that were returned under the warranty. 31 Recognized warranty expense related to December sales with an adjusting entry. Jan. 5 Sold 15e razors for $11,258 cash. 17 Replaced 50 razors that were returned under the warranty 31 Recognized warranty expense related to January sales with an adjusting entry. Problem 9-4A Part 1 1. Prepare journal entries to record above transactions and adjustments, Problem 9-4A Part 1 1. Prepare Journal entries to record above transactions and adjustments Answer is not complete. No Date General Journal Credit Debit 7.875 1 Nov 11 Cash Sales 7.875 2 Nov 11 2,100 Cost of goods sold Merchandise inventory OO 2.100 . 3 Nov 30 630 Warranty expense Accrued payroll payable X 630 4 Dec 09 3 300 > Accounts payable Merchandise Inventory 300 5 Dec 16 Sales Cost of goods sold X EX 16,880 3,780