During May 2009, its rst month of operation, Pizza Palace sold 200 coupon books for $20 each.

Question:

During May 2009, its ﬁrst month of operation, Pizza Palace sold 200 books for $20 each. The books contain four coupons, each of which can be exchanged for a large pizza.
Required:
(a) What journal entry would Pizza Palace make for the sale of the 200 books?
(b) During the week of June 8, 27 coupons were redeemed. Prepare the journal entry to account for the exchange of the coupons for pizzas.
(c) Pizza Palace prepares quarterly ﬁnancial statements. At the end of the third quarter on January 31, 2010, 67 coupons remained unredeemed. How should these books be presented on Pizza Palace’s ﬁnancial statements?
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...