Monthly sales are $530,000.Warranty costs are estimated at 5% of monthly sales.Warranties are honored with replacement products.No defective products are returned during the month.At the end of the month,the company should record a journal entry with a credit to:
A) Estimated Warranty Payable for $26,500.
B) Warranty Expense for $26,500.
C) Sales for $26,500.
D) Inventory for $26,500.
Correct Answer:
Verified
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