Monthly sales were $150,000. Warranty costs are estimated at 5% of monthly sales. In the month of sale, the company should record a debit to:
A) Sales for $7,500.
B) Warranty Expense for $7,500.
C) Warranty Payable for $7,500.
D) none of the accounts. No entry is required since the actual liability amount is not known.
Correct Answer:
Verified
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