PharoahCo. includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.30each.Pharoah's experience indicates that 60 percent of the coupons will be redeemed. During 2020,93,000bags of dog food were sold,11,640toys were purchased, and37,200coupons were redeemed. During 2021,117,200bags of dog food were sold,16,050toys were purchased, and58,600coupons were redeemed.

Determine the premium expense to be reported in the income statement and the premium liability on the balance sheet for 2020 and 2021.