Pharoah Limited sells a $580 gift card to a customer on January 1, with no expiry date. Based on past gift card sales, 85% of gift cards are redeemed and 15% are unexercised. Pharoah feels that this information has good predictive value and estimates that 15% of the gift card value will remain unredeemed. On December 31, the customer makes one purchase of $58 using the gift card.

How should the company account for this sale? Show journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem. Round answers to O decimal places, e.g. 5,275.)