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Question - The Kettle Black (TKB), a high-end kitchen store, maintains a loyalty program for its customers. For every purchase, members receive points. In fiscal 2020, the store made sales of $1 million and awarded 50,000 points. These points do not expire. The company estimates that approximately 65% of these points will be redeemed by members and that based on this, the fair value of the points is $50,000. In fiscal 2021, the store made sales of $1.25 million and awarded 62,500 points, which do not expire, have an estimated redemption rate of 65% and a fair value of $62,500. Members redeemed 15,000 points in fiscal 2021. Provide the necessary journal entries for fiscal 2020 and 2021.
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