A company sells electronics and with a warranty attached and estimates that they will experience an estimated 5% of sales for warranties. This period's sales are going to be $200,000. The company should make the following entry to record the estimated warranty expense.

• Debit estimated warranty liability $10,000; credit warranty expense $10,000
• Debit warranty expense $10,000; credit estimated warranty liability $10,000
• Debit estimated warranty liability $10,000; credit cash $10,000
• Debit warranty expense $10,000; credit sales $10,000