During $2024,$ ESB Company sells $5,000$ units of its product for $$500$ each. The fiscal year of the company ends on December $31.$ The selling price includes a one$-$year warranty on parts. It is expected that $5\%$ of the units will be defective and that repair costs will average $$50$ per unit. In the year of sale, warranty contracts are honored on $130$ units. What amount will be reported on ESB's statement of financial position as Warranty Liability on December $31,2024?$

Select one:

a$.$ $$6,000$

b$.$ $$7,000$

c$.$ $$6,500$

d$.$ $$5,000$

e$.$ $$7,500$