During December, Vixen Company sells $855,000 in merchandise that has a one-year warranty. Warranty expense is estimated at 4% of sales. On January 5 of the following year, the merchandise requires repairs that are completed the same day. The repairs cost $14,500 for materials taken from parts inventory. The entry to record the repairs that occur on January 5 is:

Multiple Choice

Debit Warranty Expense $19,700; credit Estimated Warranty Liability $19,700.

Debit Estimated Warranty Liability $34,200; credit Warranty Expense $34,200.

Debit Warranty Expense $14,500; credit Estimated Warranty Liability $14,500.

Debit Estimated Warranty Liability $19,700; credit Parts Inventory $19,700.

Debit Estimated Warranty Liability $14,500; credit Parts Inventory $14,500.