In 2018, TWIT began to manufacture and sell a new line of hockey equipment to various NHL teams. These carry a two-year warranty against defects. All warranty related work was outsourced to iFix Company, a local repair firm. They bill TWIT for all their work undertaken and are paid 70% in the same year and the balance in the following year. Based upon TWITs experience with similar products, the estimated warranty costs related to the dollar sales of any given year were as follows:

For First year of warranty 2%

For Second year of warranty 5%

Sales and actual warranty expenditures for 2018 and 2019 are presented below: 2018 2019

Sales $900,000 $1,200,000

Warranty expenditures invoiced by iFix 30,000 60,000

The journal entry to record the actual cost of warranties that TWIT recorded in 2019 would be:

a.DR Warranty Expenses ............ $60,000; CR Cash ............ $60,000

b.DR Warranty Expenses ............ $9,000; CR Cash ............ $9,000

c.DR Accounts Payable ............ $51,000; CR Estimated Warranty Liabilities ............ $51,000

d.DR Estimated Warranty Liabilities ............ $60,000; CR Accounts Payable ............ $60,000

e.None of the above.