To stimulate the sales of its Alladin breakfast cereal, Pearl Company places 1 coupon in each box. 6 coupons are redeemable for a premium consisting of a childrens hand puppet. In 2018, the company purchases 41,300 puppets at $1.60 each and sells 576,600 boxes of Alladin at $3.85 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2018, 161,400 coupons are presented for redemption.

Prepare the journal entries that should be recorded in 2018 relative to the premium plan.