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

Franconia Sales offers warranties on all their electronic goods.Warranty expense is estimated at 2% of sales revenue.In 2013,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 estimated warranty expense?

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