Giant Manufacturing Co. requires 20 coupons from its cake mix, Steel Co., to be redeemed along with $2.00 for a pan spray. Each box contains one coupon. This year 2,000,000 boxes of cake mix were sold at $10.50 per box, again each containing a coupon. They purchased 150,000 boxes of cake mix for cash at $4.20 each during the current year. They estimate that 70% of the coupons will be returned from sales this year. Only 650,000 actually were returned in the current year. Show all work.
Record the purchase of the pan spray assuming cash was paid. Debit, Credit,
Calculate the premium expense for the current year.
Record the premium expense for the year, both redemption and accrual.