During August, Arena Company sells $355,000 in product that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a balance of $11,700 before adjustment. Customers returned product for warranty repairs during the month that used $8,300 in parts for repairs. The entry to record the estimated warranty expense for the month is:
a) Debit Warranty Expense $17,750; credit Estimated Warranty Liability $17,750.
b) Debit Warranty Expense $14,350; credit Estimated Warranty Liability $14,350.
c) Debit Estimated Warranty Liability $17,750; credit Warranty Expense $17,750.
d) Debit Estimated Warranty Liability $8,300; credit Warranty Expense $8,300.
e) Debit Warranty Expense $6,050; credit Estimated Warranty Liability $6,050.