A company sells electronics and with a warranty attached and estimates that they will experience an estimated 5% of sales for warranties. This period's sales are going to be $200,000. The company should make the following entry to record the estimated warranty expense.
a. debit estimated warranty liability $10,000; credit warranty expense $10,000
b. debit warranty expense $10,000; credit estimated warranty liability $10,000
c. debit estimated warranty liability $10,000; credit cash $10,000
d. debit warranty expense $10,000; credit sales $10,000
Answers: 3
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