during its first three months of operation, palomino's sold gift cards in various amounts totaling $5,200. the gift cards are redeemable for meals within one year of the purchase date. gift cards totaling $1,900 were presented for redemption prior to year-end on December 31. the sales tax rate on restaurant sales is 7%, assessed at the time meals (not gift cards) are purchased. palimino's will remit sales taxes in January.

1&2 record (in summary form) the $5,200 in gift cards sold (keeping in mind that, in actuality, each sale if a gift card or a meal would be recorded individually) and the $1,900 in gift cards redeemed. the $1,900 includes a 7% sales tax of $124.40.

1 Record the cash received for the gift cards

2 record the redemption of gift cards

(for the recording in the general journal gift card liability is not an option to record) (also for revenue would it be deferred revenue? and for sales tax would it be sales tax payable?