During August, Boxer Company sells $366,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 4% of the selling price. The warranty liability account has a credit balance of $11,800 before adjustment. Customers returned merchandise for warranty repairs during the month that used $8,400 in parts for repairs. The entry to record the estimated warranty expense for the month is:

Debit Warranty Expense $2,840; credit Estimated Warranty Liability $2,840.

Debit Warranty Expense $11,240; credit Estimated Warranty Liability $11,240.

Debit Estimated Warranty Liability $8,400; credit Warranty Expense $8,400.

Debit Warranty Expense $14,640; credit Estimated Warranty Liability $14,640.

Debit Estimated Warranty Liability $14,640; credit Warranty Expense $14,640.