Topic Progress:

This video explains how to account for premiums and coupons (mail-in rebates, cereal boxtops, labels, etc.) that are offered by firms as an incentive to purchase a product. An example is provided to illustrate the accruing of a liability for premiums and coupons along with the associated journal entries.

UPDATE: When the granola bars are sold in the example given in this video, you would also debit Cost of Goods Sold and credit Inventory to reflect the fact that the bars are no longer in the Inventory.