Muggs Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Muggs $4 each. Muggs estimates that 45 percent of the coupons will be redeemed. Muggs Co. sold 600,000 bags of of dog food and redeemed 150,000 coupons in year 2021.

a. Prepare journal entry to record redemption of 150,000 coupons.

b. Prepare journal entry to record estimated liability for coupon claims outstanding at December 31, 2021. (Please show your working steps for the computations of premium expense and premium liability.)