Scholastic Corp. is a children's media company. It maintains over 5,000 titles (e.g., Hunger Games, Captain Underpants) and has the exclusive U.S. rights to the Harry Potter book series.

The following information was included on Scholastic's 2017 financial statements.This is not a trial balance. It is a list of accounts as they appeared on the balance sheet and income statementas of and for the year ended May 31, 2017.All amounts represent normal balances (e.g., accounts payable has a credit balance of $120). (Note: Retained earnings is ending retained earnings)

Accounts payable

$120

Long-term debt

$345

Accounts receivable

340

Loss from discontinued operations

6

Accumulated depreciation

455

Other accrued expenses

235

Allowance for doubtful accounts

26

Prepaid expenses

126

Cash

195

Prepublication costs*

160

Common stock

510

Property, plant and equipment

785

Copyrights and trademarks

250

Retained earnings

724

Cost of goods sold

1,000

Revenues

2,150

Deferred revenue

45

Royalties payable

95

Depreciation

90

SGA expense

875

Interest expense

15

Tax expense

62

Inventory

295

Treasury stock

404

* Scholastic capitalizes the art, pre-press and editorial costs incurred in the creation of the master copy of a book ("prepublication costs"). Prepublication costs are amortized (as part of cost of goods sold) over a three year period once the title is available for sale.

In fiscal year 2017, $1,350 of sales related to license products. The inventory cost Scholastic $580 to manufacture.Additionally, Scholastic pays 7% royalties on these sales.Scholastic incurs royalty expense for the use of certain intellectual property (e.g., when it sells a Star Wars book). This expense is included as part of cost of goods sold. Assume Scholastic has not paid any cash royalties yet this year.

Prepare the journal entries that Scholastic made in 2017 (1) related to the sale of the licensed products and (2) record royalty expense.