Sheridan sells 20 non-refundable $225 gift cards for 3-D printer plastic on March 1, 2020. The plastic has a stand-alone selling price of $225. The gift card has no expiration date. 2020. Sheridan estimates that customers will not redeem 15% of these gift cards. At the end of 2020, 60% of the gift cards have been redeemed.
Required: Prepare the 2020 journal entries related to sale of the gift cards at March 1, 2020 and the redemption of the gift cards in 2020. Round to nearest cent. (No entries for costs of goods sold are necessary).
Debit
Credit
To record sales of gift cards on March 1, 2020
To record redemption of gift cards in 2020