pls help

Coronado.com sold 6900 units of its product for $500 each during the year ending December 31, 2022. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $60 per unit. In the year of sale, warranty contracts are honored on 120 units for a total cost of $7200. What amount should be reported on Coronado.com's balance sheet as Warranty Liability on December 31, 2022? $5220 $7200 It cannot be determined $12420