Bass Bay Marina had a customer loyalty program at its gas dock. For every litre of gasoline purchased, the customer would get a redemption award of $ .015, which can be used to purchase products in the company's retail marine store. In July, the company sold 100,000 litres of gasoline. The entry to record the liability for the July sales would be a $ ___ credit to ___.
A) $ 1,500; Redemption Reward Liability
B) $ 1,500; Sales Discounts
C) $ 1,500; Cash
D) $ 3,000; Cash

Question

Quizplus · Accepted Answer

The liability for the redemption award is calculated as 100,000 litres x $0.015 = $1,500, which should be credited to Redemption Reward Liability.

Bass Bay Marina Had a Customer Loyalty Program at Its