Flounder sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2017. The paper has a standalone selling price of $100 (cost $80). The gift card's expiration date is June 30. 2017. Flounder estimates that customers will not redeem 10% of these gift cards.
The pattern of redemption is as follows.
Prepare the 2017 journal entries related to the gift cards at March 31, April 30, and June 30.
The first step to record the accounting information starts with the recording of business events in the books of accounts in the form of journal entries. Each journal entry should have a debit and a corresponding credit of equal amount as required by the dual entry system of accounting. Journal entries are posted into ledgers and from ledgers, the trial balance is extracted.
Answer and Explanation: 1
The journal entries for the year 2017 are made below:
|March 1||Cash (20 cards * $100)||$2,000|
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fromChapter 1 / Lesson 17
Learn about the general journal in accounting and see its use and purpose. Explore the format of journal entries and study a general journal accounting example.