Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers.

During July 2016 it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases.

Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed.

Based on past experience, Supply Club estimates a 70% probability that any point issued will be redeemed for the discount. During July 2016, the company records $215,000 of revenue and awards 250,000 loyalty points.

The aggregate stand-alone selling price of the purchased products is $215,000. Seventy-five percent of sales were cash sales, and the remainder were credit sales.

Required:

Prepare Supply Clubs journal entry to record July and August sales. During August, customers redeem 140,000 loyalty points on merchandise. Seventy-five percent of those sales were for cash, and the remainder were credit sales. (If no entry is required for a transaction/event, No journal entry required).