On December 31, 2018, Meyer Company sells equipment to Smith Inc. for $125,000. Meyer includes a 1-year assurance warranty service with the sale of all its equipment. The customer receives and pays for the equipment on December 31, 2018. Meyer estimates the prices to be $122,000 for the equipment and $3,000 for the cost of the warranty. In addition to the assurance warranty, Meyer sold an extended warranty (service type warranty) for an additional 2 years (20202021) for $2,000. The journal entry to record this transaction on December 31, 2018:

(a) Cash .................................................................. 127,000

Sales Revenue.............................................. 125,000

Unearned Warranty Revenue........................ 2,000

(b) Cash...................................................................... 125,000

Sales Revenue.............................................. 125,000

(c) Cash ........................................................................ 125,000

Sales Revenue............................................ 122,000

Unearned Warranty Revenue.................... 3,000

(d) Cash .......................................................................... 127,000

Sales Revenue................... ......................... 127,000

Select one:

a. Cash ................................................................. 127,000 Sales Revenue.................................................. 125,000 Unearned Warranty Revenue.............................. 2,000

b. Cash ............................................................... 127,000 Sales Revenue............................................ 127,000

c. Cash................................................................................. 125,000 Sales Revenue.................................................. 125,000

d. Cash ................................................................ 125,000 Sales Revenue............................................. 122,000 Unearned Warranty Revenue........................... 3,000