Horton Food Company Distributes to Consumers Coupons Which May Be

Horton Food Company distributes to consumers coupons which may be presented (on or before a stated expiration date) to grocers for discounts on certain products of Horton.The grocers are reimbursed when they send the coupons to Horton.In Horton's experience, 50% of such coupons are redeemed, and generally one month elapses between the date a grocer receives a coupon from a consumer and the date Horton receives it.During 2007 Horton issued two separate series of coupons as follows: $\begin{array}{rrrr}& & \text { Consumer } & \text { Amount Disbursed } \\\text { Issued On } & \text { Total Value } & \text { Expiration Date } & \text { as of 12/31/07 }\\\hline1 / 1 / 07 & \$ 375,000 & 6 / 30 / 07 & \$ 177,000 \\7 / 1 / 07 & 540,000 & 12 / 31 / 07 & 225,000\end{array}$ The only journal entries to date recorded debits to coupon expense and credits to cash of $536,000.The December 31, 2007 balance sheet should include a liability for unredeemed coupons of

A) $0.
B) $45,000.
C) $93,000.
D) $270,000.