Bonita Places a Coupon in Each Box of Its Product $\quad 6,400$

Multiple Choice

Bonita places a coupon in each box of its product.Customers may send in five coupons and $3, and the company will send them a recipe book.Sufficient books were purchased at a cost of $5 each.A total of 400, 000 boxes of product were sold in 2010.It was estimated that 6% of the coupons would be redeemed.During 2010, 8, 000 coupons were redeemed.Which entry should be made at December 31, 2010?

A)
Premium Expense $\quad 6,400$
Estimated Premium Claims Outstanding $\quad 6,400$

B)
Premium Expense $\quad 16,000$
Estimated Premium Claims Outstanding $\quad 16,000$
C)
$\begin{array} { l r } \text { Premium Expense } & 6,400 \\\text { Inventory of Premiums } && 6,400\end{array}$
D)
Premium Expense $\quad 9,600$
Estimated Premium Claims Outstanding $\quad 9,600$