Big Box Inc. launches a new advertising promotion where, for each purchase over $30, it offers a coupon for a 35% discount on a future purchase of $30 or more. There is a limit of one coupon per customer. Big Box Inc. estimates that 28% of customers receiving the coupon will redeem the coupon on an average purchase of $40. Sales on the first day of the one-week promotional period totaled $460,000 resulting in 4,600 coupons distributed. Assume all sales were cash sales. Cost of sales is 45% of the selling price.

a. Determine how many performance obligations are included in a sales transaction during the advertising promotion program. Assume that coupons readily available to the public online or in company fliers have a maximum value of 20% off a purchase of $30 or more

.b. Record the journal entry to record revenue in the first day of the promotion period using the relative percentages to allocate standalone selling prices.

c. Only 25% of the coupons were redeemed during the redemption period on qualified purchases. Record the adjusting journal entry to record the redemption of coupons. Round each allocated transaction price to the nearest whole dollar.