OK Corporation sells gift cards in various denominations. The company likes to sell these cards because cash is collected immediately, but a certain percentage will never be redeemed for merchandise. On December 1, Year One, OK reported a balance in unearned revenue of $728,000 from the sale of gift cards.

a.) During December, OK sold an additional $578,000 in gift cards. Prepare this journal entry.

b.) During December, gift cards totaling $327,000 were redeemed to purchase inventory that had originally cost OK $190,000. Prepare these journal entries. Assume OK uses a perpetual inventory system.

c.) On December 31, OKs accountant determines that 3 percent of the outstanding gift cards will never be redeemed because they have expired. Prepare a journal entry if necessary.

d.) What is the amount reported by OK on its December 31, Year One, balance sheet for unearned revenues?