During August Arena Company sells $349000 in product that has a one year warrant

During August Arena Company sells $349000 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 $11100 before adjustment. Customers returned product for warranty repairs during the month that used $7700 in parts for repairs. The entry to record the estimated warranty expense for the month is: Debit Warranty Expense $17450; credit Estimated Warranty Liability $17450.
Debit Estimated Warranty Liability $7700; credit Warranty Expense $7700.
Debit Estimated Warranty Liability $17450; credit Warranty Expense $17450.
Debit Warranty Expense $6350; credit Estimated Warranty Liability $6350.
Debit Warranty Expense $14050; credit Estimated Warranty Liability $14050.