Wildhorse Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty program point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases.On July 2, 2025 customers purchase products for $310,000 (with a cost of $161200) and earn 31,000 points redeemable for future purchases. Wildhorse expects 25,600 points to be redeemed. Wildhorse estimates a standalone selling price of $2.50 per points (or $77,500 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Wildhorse concludes that the points are a separate performance obligation.

Prepare the journal entries to record the sale of the product and related points on July 2, 2025:

July 2, 2025 (To record sales)

July 2, 2025 (to record cost of goods sold)

At the end of the first period (July 31,2025), 10240 loyalty points are redeemed. Wildhorse continues to expect 25,600 loyalty points to be redeemed in total. Determine the amount of loyalty points revenue to be recognized at July 31, 2025.

Amount of loyalty point revenue