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Appropriate journal entries for the sale of the gift card in January will be (B) Debit Cash, $50; credit Deferred Revenue, $50.
What are journal entries?
- A journal entry is an act of keeping or producing records of any transaction, economic or non-economic.
- Transactions are recorded in an accounting journal, which displays a company's debit and credit balances.
- The journal entry can be made up of numerous recordings, each of which is either a debit or a credit.
- The amount of the debits must equal the total of the credits, or the journal entry is considered imbalanced.
Journal entry for the sale of the gift card in January:
Debit Cash, $50; credit Deferred Revenue, $50
Therefore, appropriate journal entries for the sale of the gift card in January will be (B) Debit Cash, $50; credit Deferred Revenue, $50.
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The question you are looking for is given here:
In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the sale of the gift card in January?
A) Debit Cash, $50; credit Sales Revenue, $50.
B) Debit Cash, $50; credit Deferred Revenue, $50.
C) Debit Sales Revenue, $20; credit Cash, $20.
D) No journal entry is necessary.
