Starbucks generates revenues in many different ways. In addition to owning its own stores, it licenses other companies to sell Starbucks brewed and ground coffees, teas, and other products. (Using Revenue Recognition approach)

Starbucks' "Gold Level" customer purchase 15 cups of coffee and then recive a free 16th cup of coffee.How should starbucks account for this customer loyalty program? (Assume that the selling price for a cup of coffee is $2.20 and that the direct inventory cost per cup is $1.50)