Cracker Corporation began a special promotion in July 2009 in an attempt to increase sales. A coupon was placed in each box of product. Customers could send in 5 coupons for a free prize. Each prize cost Cracker Corporation $2.00. Cracker's management estimated that 70% of the coupons would be redeemed. For the six months ended December 31, 2009, the following information is available:
Required:
Record all necessary journal entries for the premium offer for 2009.
$$\begin{array} { l l }
\text { Products sold } & 2,000,000 \text { boxes } \
\text { Prizes purchased } & 240,000 \
\text { Coupons redeemed } & 560,000
\end{array}$$

Question

Cracker Corporation began a special promotion in July 2009 in an attempt to increase sales. A coupon was placed in each box of product. Customers could send in 5 coupons for a free prize. Each prize cost Cracker Corporation $2.00. Cracker's management estimated that 70% of the coupons would be redeemed. For the six months ended December 31, 2009, the following information is available:
Required:
Record all necessary journal entries for the premium offer for 2009.
 $$\begin{array} { l l } 
\text { Products sold } & 2,000,000 \text { boxes } \
\text { Prizes purchased } & 240,000 \
\text { Coupons redeemed } & 560,000
\end{array}$$

Quizplus · Accepted Answer

The Answer of Cracker Corporation began a special promotion in July 2009 in an attempt to increase sales. A coupon was placed in each box of product. Customers could send in 5 coupons for a free prize. Each prize cost Cracker Corporation $2.00. Cracker's management estimated that 70% of the coupons would be redeemed. For the six months ended December 31, 2009, the following information is available:
Required:
Record all necessary journal entries for the premium offer for 2009.
 $$\begin{array} { l l } 
\text { Products sold } & 2,000,000 \text { boxes } \
\text { Prizes purchased } & 240,000 \
\text { Coupons redeemed } & 560,000
\end{array}$$

Cracker Corporation Began a Special Promotion in July 2009 in an Attempt