How to Process Free Items in SD

Hi,

Our scenario is like this.

We get free merchandise from our supplier. That free merchandise will be included in our inventory thus affecting the Moving Average Price of that item.We also sell the free merchandise to our customer thru SD.

Now we will be having a promo. Those free items that we are getting from our supplier which has already been included in our inventory will be given out as a free item. If we are going to process this thru regular SD processing, there will be recording of cost of sales, sales and output tax. Which should not be the case since those are free items.

Is there a way to process this?

Thank you.