Question - To stimulate the sales of its Alladin breakfast cereal, Swifty Company places 1 coupon in each box. 5 coupons are redeemable for a premium consisting of a children's hand puppet. In 2018, the company purchases 46,300 puppets at $1.65 each and sells 483,000 boxes of Alladin at $3.90 a box. From its experience with other similar premium offers, the company estimates that 50% of the coupons issued will be mailed back for redemption. During 2018, 149,500 coupons are presented for redemption.
Prepare the journal entries that should be recorded in 2018 relative to the premium plan.