Lakeshore Gelato Distributors (LGD) began a special promotion in July 2012 in an attempt to increase sales. A coupon was placed on top of each Gallon of Gelato. Customers could send in five coupons for a free mini ice cream scooper. Each scooper cost LGD $2.00. LGD's management estimated that 70% of the coupons would be redeemed. For the six months ended December 31, 2012, the following information is available:
LGD Sold 2,000,000 gallons of Gelato Purchased 240,000 scoopers Coupons Redeemed 560,000
Required:
Record all necessary journal entries for the premium offer for 2012.