Spares Co. sells products under a two-year assurance-type warranty. The estimated cost of warranty repairs is 2% of net sales. In 2019, Spares sold $3 million in products. Record the journal entries for the warranties associated with these sales.
A. Cr. Inventory $60,000
B. Dr. Warranty Expense $60,000
C. Dr. Cash $60,000
D. Dr. Cost of Goods Sold $60,000
E. Cr. Warranty liability $60,000
F. Cr. Warranty Expense $60,000
