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A retailer sells goods to a customer for $100,000 and at the same time provides...

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Accounting

A retailer sells goods to a customer for $100,000 and at the same time provides a coupon for a 60% discount off a future purchase during the next 90 days. The retailer intends to offer a 10% discount on all sales as part of a promotional campaign during the same period. Management estimates that 75% of customers that receive the coupon will exercise the option for the purchase of, on average, $40,000 of discounted additional product. How should the retailer account for the option provided by the coupon?

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