Mott co includes one coupon in each bag of dog food it sell. In return for 8 coupons, customers receive a leash. The leashes cost Mott 2.00. Mott estimates that 40 % of the coupons will be redeemed. Data for 2010 and 2011 are as follows:

2010 bags of dog food sold: 500,000; leashes purchased: 18,000; coupons redeemed 120,000.

What is the premium expense for 2010.

The book says the answer is $50,000. I can't get it to work out. please explain and provide journal entry.