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Exercise 11-05 a-c (Part Level Submission) Crane Company sells automatic can openers under a 75-day...

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Exercise 11-05 a-c (Part Level Submission) Crane Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Crane 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 $15. The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month Units Sold Units Defective Prior to December 31 November 600 30,000 32,000 December 400 (a) Your answer has been saved and sent for grading. See Gradebook for score details. Prepare the journal entry to record the costs incurred in honoring 1,000 warranty claims. (Assume actual costs of $15,000.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Warranty Expense 27900 Warranty Liability 27900 (To record honoring of warranty contracts.) (b) Prepare the journal entry to record the warranty liability at December 31 for the units sold in November and December. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

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