PinaCompany offers an MP3 download (seven-single medley) as a premium for every5candy bar wrappers presented by customers together with $2.90. The candy bars are sold by the company to distributors for30cents each. The purchase price of each download code to the company is $2.65. In addition, it costs50cents to distribute each code. The results of the premium plan for the years 2017 and 2018 are as follows. (All purchases and sales are for cash.)

2017 2018

MP3 codes purchased 300,000 396,000

Candy bars sold 2,803,800 2,967,500

Wrappers redeemed 1,440,000 1,800,000

2017 wrappers expected to be redeemed in 2018 348,000

2018 wrappers expected to be redeemed in 2019 420,000

part 1

Prepare the journal entries that should be made in 2017 and 2018 to record the transactions related to the premium plan of thePinaCompany.

Account Titles and Explanation Debit Credit

2017

part 2

Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2017 and 2018.

Amount Account 2017 2018 Classification