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ABC Electronics Corporation carries a wide variety of electronic devices, replacement parts, and chargers. ABC uses two sales promotion techniques-warranties and premiums-to attract customers. All electronic devices are sold with a 1-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 1% of sales. The premium is offered on the tablet devices only. Customers receive a coupon for each dollar spent on tablet devices. Customers may exchange 200 coupons and $20 for an MP3 player. ABC pays $32 for each player and estimates that 60% of the coupons given to customers will be redeemed. ABC's total sales for 2021 were $6,300,000-$5,700,000 from the various electronic devices, of which $1,500,000 of sales were tablets, and $600,000 for replacement parts and chargers. Parts and labor for warranty work totaled $89,500 during 2021 ($44,000 of the work is related to pre-2021 sales). A total of 6,500 players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2021. The balances in the accounts related to warranties and premiums on January 1, 2021, were as shown below. Premium inventory Premium liability Warranty liability 42,600 53,200 61,900 Required: ABC is preparing its financial statements for the year ended December 31, 2021. Prepare the journal entries required for ABC to record all transactions and adjustments needed to update its premium and warranty programs. Determine the amounts that will be shown on the 2021 financial statements for the following. a. Warranty expense. b. Warranty liability c. Premium expense d. Premium inventory e. Premium liability

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