s Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are automatically indented whenthe amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for theamounts.)Account Titles and ExplanationCashPremium ExpenseInventory of PremiumsAccount Titles and ExplanationPremium ExpenseDebitEstimated Liability for Premiums7200Debit600Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (Credit account titles areautomatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts.)Credit528007800Credit52800 Cheyenne Corporation sold Sugar Frosted Cocoa Bombs, a children's breakfast cereal. As a promotion, Cheyenne offered itscustomers a free music CD in exchange for 4 boxtops, plus $3.00 to cover postage and handling. The CD cost Cheyenne $3.25, andpostage costs to mail the CDs out to customers were $2.50. Cheyenne estimated that 80% of its customers would redeem boxtops.Cheyenne purchased 10,600 CDs at the start of the promotion in November, 2020. 128,000 boxes of cereal were sold duringNovember and December, 2020, and Cheyenne's year-end was December 31. Prior to the end of the fiscal year, 9,600 customerstook advantage of the offer, which continued until February, 2021. Cheyenne follows ASPE and uses the expense approach toaccount for its premiums.

Journal entry is used to record the financial transactions in the book of accounts in two different…

Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are automatically indented wh the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Cash Premium Expense Inventory of Premiums Debit Account Titles and Explanation Premium Expense Estimated Liability for Premiums 7200 Debit 600 Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Credit 52800 7800 Credit 52800

Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are automatically indented wh the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Cash Premium Expense Inventory of Premiums Debit Account Titles and Explanation Premium Expense Estimated Liability for Premiums 7200 Debit 600 Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Credit 52800 7800 Credit 52800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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DMH Corporation sold Sugar Frosted Cocoa Bombs, a children's breakfast cereal. As a promotion, DMH offered its customers a free music CD in exchange for four box tops, plus $3.10 to cover postage and handling. The CD cost DMH $3.35, and postage costs to mail the CDs out to customers were $2.50. DMH estimated that 70% of its customers would redeem box tops. DMH purchased 11,400 CDs at the start of the promotion in November, 2023. 120,000 boxes of cereal were sold during November and December, 2023, and DMH's year-end was December 31. Prior to the end of the fiscal year, 7,700 customers took advantage of the offer, which continued until February, 2024. DMH follows ASPE and uses the expense approach to account for its premiums. C A
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