1. The problem asks to prepare journal entries in 2027 related to the warranty for sprinklers discontinued after 2026, recording actual expenditures. 2. When a product warranty is provided, companies estimate warranty expenses and record a liability (warranty reserve) at the time of sale. 3. After discontinuation, actual warranty expenditures in 2027 must be recorded by debiting the warranty liability and crediting cash or accounts payable. 4. The journal entry to record actual warranty expenditures in 2027 is: $$\text{Debit: Warranty Liability} \quad \text{(for actual expenditures)}$$ $$\text{Credit: Cash or Accounts Payable} \quad \text{(for actual expenditures)}$$ 5. This reduces the warranty liability and reflects the cash outflow or payable for repairs or replacements under warranty. 6. No new warranty expense is recorded in 2027 since sales were discontinued after 2026. 7. Summary: Record actual warranty costs by debiting warranty liability and crediting cash/accounts payable in 2027.