Sheffield Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Sheffield 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 $20. The units sold and units defective that occurred during the last 2 months of 2020 are as follows. (See images below)

I'm almost certain that the only accounts that need to be listed in this 3 entries would be Warranty Expense, Warranty Liability and Repair Parts but I do not know this for a fact.

Warranty Expense = (30800 + 32800)(0.03)(20) = 38160 So I would debit 38160 to Warranty Expense then credit 38160 to Warranty Liability ? Below is a couple images showing the question in its entirety. I could really use help with how the figures are being calculated.

I did see similar questions, however, the explanations were unclear.

Exercise 11-05 a-c Sheffield Company sells automatic can openers under a 75-day warranty for defective merchandise. Based on past experience, Sheffield 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 $20. The units sold and units defective that occurred during the last 2 months of 2020 are as follows. Month November December Units Sold 30,800 32,800 Units Defective Prior to December 31 616 410 Prepare the journal entry to record the costs incurred in honoring 1,026 warranty claims. (Assume actual costs of $20,520.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation eoi Credit (To record honoring of warranty contracts.) SHOW LIST OF ACCOUNTS LINK TO TEXT