Transcribed Image Text: Mercado Company has an arrangement with Kian Company that operates a customer loyalty program. The entity grants loyalty points of Kian Company when they spend a specified

Transcribed Image Text: Mercado Company has an arrangement with
Kian Company that operates a customer
loyalty program. The entity grants loyalty
points of Kian Company when they spend a
specified amount on purchases.
Program members can redeem their points
with Kian Company. The points have no
expiry date.
During 2020, the customers earned 60,000
points. the stand-alone selling price of each
loyalty point is estimated at P20.
The sales during 2020 amounted to
P6,800,000 based on stand-alone selling
price.
According to Kian Company:
On december 31, 2020, 28,800 points have
been redeemed in exchange of purchases.
In 2021, customers have redeemed 9,000O
points
QUESTION:
1) How much is the initial unearned customer
loyalty points to be recognized by Mercado?