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On October 1, 2021, a company sells $800 of gift cards to customers. The gift cards expire one year from the date of sale. By October 1, 2022, $750 of the gift cards have been redeemed and the sales recorded at the time of redemption. What entry, if any, should the company record on October 1, 2022?

A) Debit Sales Revenue, S50; credit Cash, S50.
B) Debit Cash, $750; credit Sales Revenue, $750.
C) Debit Deferred Revenue, S50; credit Sales Revenue, $50.
D) No journal entry is necessary.

Respuesta :

D) No journal entry is necessary

Explanation:    

A company sells $800 of gift cards to customers on October 1, 2021, and

The gift cards expires in one year from the date of sale., that is September 30,2021., All accounding entries related to the gift card should be entered with in the period of one year., so., On October 1, 2022 .,No journal entry is necessary

C) Debit Deferred Revenue, $50; credit Sales Revenue, $50.

  • The entry that should the company record on October 1, 2022 is as follows:

On Oct 1, 2022

Deferred revenue ($800 - $750) $50

        To Sales revenue $50

(Being gift card redeemed is recorded)

Therefore we can conclude that the option c is correct.

Learn more: brainly.com/question/6201432

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