Khalid inc. sold 600 units of a product that has a one-year warranty on parts. The average cost of honoring one warranty contract is $60. During the year 30 contracts are honored at a cost of $1,800. It is estimated that 60 contracts will be honored in the following year. The adjusting entry at the end of the current year will include .

a.	credit to Warranty Liability for $5,400.
	b.	debit to Warranty Expense for $5,400.
	c.	credit to Warranty Liability for $3,600.
	d.	debit to Warranty Expense for $1,800.