Premiums
Creamy Candy Company Offers a Coffee Mug as a Premium

Premiums
Creamy Candy Company offers a coffee mug as a premium for every ten 50-cent candy bar wrappers presented by customers together with $ 1.00. The purchase price of each mug to the company is 90 cents; in addition it costs 60 cents to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): $\begin{array}{ll} \text{ }& 2020 & 2021 \\\text{ Coffee mugs purchased. ...................................................... } & 480,000 & 400,000 \\\text{ Candy bars sold } ..................................................................& 3,750,000 & 4,500,000 \\\text{ Wrappers redeemed ............................................................ } & 1,900,000 & 2,800,000 \\\text{ 2020 wrappers expected to be redeemed in 2021 ..................} & 1,300,000 & \\\text{ 2021 wrappers expected to be redeemed in 2022 ...................} & & 1,800,000 \\ \end{array}$
Instructions
a) Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by assuming Creamy Candy uses the expense approach.
b) Indicate the account names, amounts, and classifications of the items related to the premium plan that would appear on the statement of financial position and income statement at the end of 2020 and 2021.