Franconia Sales Offers Warranties on All Their Electronic Goods $\begin{array} { | c | r | r | } \hline \text { Estimated warranty payable } & 7,500 & \\\hline \text { Cash } & & 7,500 \\\hline\end{array}$

Franconia Sales offers warranties on all their electronic goods. Warranty expense is estimated at 2% of sales revenue. In 2019, Franconia had $500,000 of sales. In the same year, Franconia paid out $7,500 of warranty payments. Which of the following is the entry needed to record the disbursement of warranty payments?

A) $\begin{array} { | c | r | r | } \hline \text { Estimated warranty payable } & 7,500 & \\\hline \text { Cash } & & 7,500 \\\hline\end{array}$
B) $\begin{array} { | c | r | r | } \hline \text { Warranty expense } & 7,500 & \\\hline \text { Estimated warranty payable } & & 7,500 \\\hline\end{array}$
C) $\begin{array} { | c | r | r | } \hline \text { Warranty expense } & 10,000 & \\\hline \text { Estimated warranty payable } & & 10,000 \\\hline\end{array}$
D) $\begin{array} { | c | r | r | } \hline \text { Warranty expense } & 10,000 & \\\hline \text { Sales revenue } & & 10,000 \\\hline\end{array}$