Wishful Oil Corp. offers customers who purchase cans of oil a baby fir tree that can be planted
to help mitigate the impact of climate change.
The customer has to send in 3 UPC codes from the oil along with $1.00 for shipping and handling.
The company has the following information related to these premiums for 2020
Cost of each baby fir tree			$ 2.00
Cost to mail each tree to customers			$ 1.50
Cans of motor oil sold in 2020			980,000
Percentage of UPC codes estimated to be redeemed			60%
Actual UPC codes redeemed during 2020			320,000
Compute the December 31 premium liability and prepare the journal entry to record it.