CircuitTown commenced a gift card program in January 2018 and sold $10,000 of gift cards in January, $15,000 in February, and $16,000 in March 2018 before discontinuing further gift card sales. During 2018, gift card redemptions were $6,000 for the January gift cards sold, $4,500 for the February cards, and $4,000 for the March cards. Circuit Town considers gift cards to be "broken" (not redeemable) 10 months after sale.
Required:
1. How much revenue will Circuit Town recognize with respect to January gift card sales during 2018?
2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards.
3. How much revenue will Circuit Town recognize with respect to March gift card sales during 2018?
4. What liability for deferred revenue associated with gift card sales would Circuit Town show as of December 31, 2018?