Question

Colbert sells 20 non-refundable $100 gift cards for 3-D printer plastic on March 1, 2020. The plastic has a stand-alone selling price of $100 (cost $80). The gift card expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards.

The pattern of redemption is as follows:

Date	Cumulative Redemption Rate
March 31	50%
April 30	80%
June 30	85%

Prepare the 2020 journal entries related to the gift cards at March 1, March 31, April 30, and June 30. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)

Answer 1

Date	Particluars	Debit	Credit
1-Mar-20	Cash (100 * 20)	$2,000
	Gift Card Liability		$2,000
1-Mar-20	Gift Card Liability	$200
	Revenue (2000 *10%)		$200
31-Mar-20	Card Liabilty	$1,000
	Sales (2000 * 50%)		$1,000
	Cost of Goods Sold	$800
	Inventory (20 * $80 *50%)		$800
30-Apr-20	Gift Card Liability	$600
	Sales (2000 * 30%)		$600
	Cost of Goods Sold	$480
	Inventory (20 * $80 *30%)		$480
30-Jun-20	Gift Card Liability	$100
	Sales (2000 * 5%)		$100
	Cost of Goods Sold	$80
	Inventory (20 * $80 *5%)		$80
30-Jun-20	Gift Card Liability	$100
	Revenue (2000 *5%)		$100