On December 5, 2019, Super Circuit Store sold gift certificates totaling $15,000. By December 31, 2019, all but $2,500 worth of these certificates had been redeemed for merchandise. Outstanding certificates were then redeemed by January 15, 2020.

Required:

1.	Prepare journal entries on Super Circuits books to reflect the preceding transactions.
2.	How would the gift certificates be reported on Super Circuits balance sheet on December 31, 2019?

CHART OF ACCOUNTS

Super Circuit Store

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
189	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue: Gift Certificates
261	Income Taxes Payable

	EQUITY
311	Common Stock
331	Retained Earnings

	REVENUE
411	Sales

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense

X

General Journal

1. Prepare journal entries on Super Circuits books to reflect the gift certificate transactions in December and January. Include any year-end adjustments related to the gift certificate transactions.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

2. How would the gift certificates be reported on Super Circuits balance sheet on December 31, 2019?

Balance Sheet Instruction

SUPER CIRCUIT STORE

Partial Balance Sheet

December 31, 2019

1	Current Liabilities:
2