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On October 29, Lobo Company began operations by purchasing razors for resale. The razors have...

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Accounting

On October 29, Lobo Company 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 $14 and its retail selling price is $70. The company expects warranty costs to equal 6% of dollar sales. The following transactions occurred.
November 11 Sold 60 razors for $4,200 cash.
November 30 Recognized warranty expense related to November sales with an adjusting entry.
December 9 Replaced 12 razors that were returned under the warranty.
December 16 Sold 180 razors for $12,600 cash.
December 29 Replaced 24 razors that were returned under the warranty.
December 31 Recognized warranty expense related to December sales with an adjusting entry.
January 5 Sold 120 razors for $8,400 cash.
January 17 Replaced 29 razors that were returned under the warranty.
January 31 Recognized warranty expense related to January sales with an adjusting entry.
Required:
1. Prepare journal entries to record above transactions and adjustments.
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