Kellogg Cereal Company offers a premium to its customersa glass cup(cost to kellogg Cereal is $1.00) upon return of 25 coupons. Two coupons are placed in each box of cereal sold. The company estimates, on the basis of past experience, that only 50% of the coupons will ever be redeemed. During 2019, 10 million boxes of cereal are sold at $3.50 each. Eight million coupons are redeemed during 2019. kellogg Cereal purchased 410,000 glass cups for the plan in 2019.

Journal entries in 2019 related to the premium plan would include: