Ragas Inc Sold Goods Worth $50,000 in the Year 2013 and and Estimated

Ragas Inc. sold goods worth $50,000 in the year 2013 and estimated 4% warranty expense for the year. Customers complained of defects and goods worth $1,500 had to be replaced. Which of the following is the correct the journal entry for honoring the warranties with goods?

A) $$\begin{array} { | c | r | r | } \hline \text { Estimated Warranty Payable } & 1,500 & \\\hline \text { Cash } & & 1,500 \\\hline\end{array}$$
B) $$\begin{array} { | c | r | r | } \hline \text { Estimated Warranty Payable } & 1,500 & \\\hline \text { Merchandise Inventory } & & 1,500 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Warranty Expense } & 1,500 & \\\hline \text { Merchandise Inventory } & & 1,500 \\\hline\end{array}$$
D) $$\begin{array} { | c | r | r | } \hline \text { Estimated Warranty Payable } & 1,500 & \\\hline \text { Warranty Expense } & & 1,500 \\\hline\end{array}$$