Circuit City sold a $2-$year warranty policy on a TV set for $ $240.$ It is estimated that the expected cost to outsource servicing this warranty is $ $40($assume immediate payment of cash$).$ What would be the journal entry for this at the point of sale of the contract?

a$.$

Debit: Cash $200,$ Prepaid Warranty Expense $40$; Credit: Revenue $240$

b$.$

Debit: Cash $200,$ Prepaid Warranty Expense $40$; Credit: Deferred Revenue $240$

c$.$

Debit: Cash $200,$ Warranty Expense $40$; Credit: Revenue $240$

d$.$

Debit: Cash $200,$ Warranty Expense $40$; Credit: Deferred Revenue $240$

e$.$

None of the above