Vargas, Inc. sold goods with a selling price of

$ 66 comma 000$66,000

in 2019 and estimated

22%

warranty expense for the year. Customers complained of defects, and goods with a cost of

$ 2 comma 500$2,500

had to be replaced. Which of the following is the correct journal entry for honoring the warranties with goods?

A.

Warranty Expense	2 comma 5002,500
Merchandise Inventory		2 comma 5002,500

B.

Estimated Warranty Payable	2 comma 5002,500
Warranty Expense		2 comma 5002,500

C.

Estimated Warranty Payable	2 comma 5002,500
Cash		2 comma 5002,500

D.

Estimated Warranty Payable	2 comma 5002,500
Merchandise Inventory		2 comma 5002,500