The entity includes one coupon in each bag of dog food it sells for $50 per bag. In return for eight coupons, customers receive a leash. The leashes cost $10.00 each. The leashes can also be sold separately by the company at a sales price of $25 each. The entity estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows:
2020
Bags of dog food sold - 250,000
Leashes purchased - 9,000
Coupons redeemed - 60,000
2021
Bags of dog food sold - 300,000
Leashes purchased - 11,000
Coupons redeemed - 75,000
Prepare a working paper showing computations for unearned revenue from premiums