Khalid inc. sold600 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$3,600.

b.debit to Warranty Expense for$1,800.

c.credit to Warranty Liability for$5,400.

d.debit to Warranty Expense for$5,400.