Masterpiece Sales Company Offers Warranties on All Their Electronic Goods

Masterpiece Sales Company offers warranties on all their electronic goods.Warranty expense is estimated at 3% of sales revenue.In 2019,the company had $603,000 in sales.In the same year,Masterpiece Sales replaced defective goods with goods that had a cost of $16,500.Which of the following is the entry needed to record the replacement of the defective goods?

A) $$\begin{array} { | c | r | r | } \hline \text { Estimated Warranty Payable } & 16,500 & \\\hline \text { Merchandise Inventory } & & 16,500 \\\hline\end{array}$$
B) $$\begin{array} { | r | r | r | } \hline \text { Warranty Expense } & 16,500 & \\\hline \text { Estimated Warranty Payable } & & 16,500 \\\hline\end{array}$$
C) $$\begin{array} { | r | r | r | } \hline \text { Warranty Expense } & 18,090 & \\\hline \text { Estimated Warranty Payable } & & 18,090 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Warranty Expense } & 18,090 & \\\hline \text { Merchandise Inventory } & & 18,090 \\\hline\end{array}$$

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