Candlebox company sells its products in expensive, reusable containers. The customer is charged a deposit for each container delivered and receives a refund for each container returned within two years after the year of delivery. Candlebox accounts for the containers not returned within the time limit as being sold at the deposit amount. Information for 2009 is as follows:

Instructions:

1) Prepare all journal entries required for Candlebox Company during 2009 for the returnable containers liability.

2) Compute the total amount Candlebox should report as a liability fro returnable containers at December 31, 2009.

3) Should the liability in the question 2 be reported as current or long-term?