General Product Inc. distributed 140 million coupons in 2021. The coupons are redeemable for 40 cents each. General anticipates
that 70% of the coupons will be redeemed. The coupons expire on December 31, 2022. There were 56 million coupons redeemed in 2021 and 45 million redeemed in 2022. General recognizes coupon expense in the period coupons are issued. What was General's coupon promotional expense in 2022?
<span>Let us first find out how much of the prepaid subscriptions has been used up during the reporting year. $1548 is for 36 months. So the monthly rate of subscription charges will be 1548/36 = 43. During the reporting year, subscription charges are paid only for 9 months( from April to December) So the amount to be debited to subscription charges = 43 * 9 = 387. Subscription charges will be debited with $ 387 and prepaid subscriptions account will be credited with the same amount. The remaining amount, 1548-387=1161, will remain in prepaid subscriptions account as a debit balance.</span>
