Masterpiece Sales Corporation Offers Warranties on All Their Electronic Goods

Masterpiece Sales Corporation 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) $\begin{array}{|c|c|c|}\hline \text { Estimated Warranty Payable } & 16,500 & \\\hline \text { Merchandise Inventory } & & 16,500\\\hline\end{array}$

B) $\begin{array}{|l|c|c|}\hline \text { Warranty Expense } & 16,500 & \\\hline \text {Estimated Warranty Payable } & & 16,500\\\hline\end{array}$


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