Maffett Ticket Brokers is a reseller of tickets to sporting events and concerts. During $20$X$1,$ Maffett sold gift cards totaling $$250,000.$ Based on past experience, Maffett expects that $1\%$ of the gift card purchases will not be redeemed by the time they expire, five years after issuance.

During $20$X$1,$ $$150,000$ of the gift card purchases from $20$X$1$ were used to purchase tickets that had cost Maffett $$90,000.$

Required:

Prepare the journal entry Maffett uses to record its activity related to the above transactions in $20$X$1,$ assuming state law does not require Maffett to remit the breakage to the state.

Prepare the journal entry Maffett uses to record its activity related to the above transactions in $20$X$1,$ assuming state law requires Maffett to remit the breakage to the state upon expiration of a gift card.