Pop Company sells banana juice. In order to promote the drink among teenagers and others who

might otherwise be indifferent to the product, the entity inaugurated in the current year a premium

plan called "Drink N Win". For every 10 bottle caps and 5 pesos, the customers receive an attractive

ballpen and become eligible for a grand prize of 5,000 in cash which is awarded for every 100 tops

turned in. The entity estimated that only 25% of bottle caps shall be presented for redemption.

During the current year, entity sold 400,000 bottles of banana juice at 9 pesos each. Purchased 10,000

ballpens for a total cost of 900,000 and incurred non-deferrable cost of 30,000 applicable to the

premium plan. A total of 8,000 ballpens have been redeemed.

Requirement: Prepare journal entries to record the transactions relating to premium plan for the

current year.