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Crane Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash):

		2020		2021
Coffee mugs purchased		700,000		810,000
Candy bars sold		5,700,000		6,800,000
Wrappers redeemed		2,600,000		4,250,000
2020 wrappers expected to be redeemed in 2021		1,900,000
2021 wrappers expected to be redeemed in 2022				2,690,000

Part 1

Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Crane Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
2020
	(To record purchase of coffee mugs)
2020
	(To record sale of candy bars)
2020
	(To record coffee mugs offered for wrappers redeemed)
2020
	(To record liability against expected redemption of wrappers)
2021
	(To record purchase of coffee mugs)
2021
	(To record sale of candy bars)
2021
	(To record coffee mugs offered for wrappers redeemed)
2021
	(To record liability against expected redemption of wrappers)

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Part 2

Indicate the account names, amounts, and classifications of the items related to the premium plan that would appear on the Crane Candy Company balance sheet and income statement at the end of 2020 and 2021. Balance Sheet

Account Name		Class		2020		2021
		Operating IncomeOperating ExpenseCurrent LiabilityCurrent Asset		$		$
		Operating IncomeOperating ExpenseCurrent AssetCurrent Liability		$		$

Income Statement

Account Name		Class		2020		2021
		Operating IncomeCurrent LiabilityCurrent AssetOperating Expense		$		$

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