Question 8 Not yet answered Marked out of 1.00 P Flag question On June 25, 2020, Kermit Inc. sold inventory for $125,000 cash. The product is subject to an assurance-type warranty and the company estimates 2% of sales as a warranty liability. On August 29, 2020, customers discovered defects and the firm incurred $500 to replace defective parts. What will the warranty liability account balance be at December 31, 2020? Select one: a. $1,500 O b. $2,000 O C. $500 d. $2,500 O e. $1,000