CCPC is a public company with a calendar year end. It launches a new detergent Fresh & Bright on Sept 1,2009. It drops 500,000 coupons from Sept 1, 2009-Oct 1, 2009. Coupons expire Oct 1,2010. Coupon is for $2. It is estimated that 2% if coupons will be redeemed. How should ccpc account for coupon drop. Prepare memo to address the following:

What are the accounting issues & relevant component of authoritative literature?

When should ccpc recognize effect of coupon drop in its financial statements?

What are the accounting implications if redemption rate changes to 2.5%?

How should the effects of coupon drop be reflected in the income statement. What are necessary journal entries