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Accounting for Gift Cards

Assume Ikeo Inc. sold $$60,000$ of gift cards during the last two weeks of December in Year $1.$ No gift cards were redeemed in Year $1.$ A total of $$54,000$ of the gift cards were redeemed for store purchases during Year $2.$ On December $31$ of Year $2,$ Ikeo Inc. calculates the remaining balance of unredeemed gift cards of $$6,000($ $$60,000$ less $$54,000).$ Based on previous experiences, Ikeo estimates gift card breakage to be $5\%$ of total gift card sales. Ikeo uses the proportional method to recognize income on gift card breakage.

Required

a$.$ Record the sale of gift cards in Year $1.$

b$.$ Record the redemption of gift cards in Year $2.$

c$.$ Record revenue in Year $2$ due to gift card breakage using the proportional method.

Note: Carry all decimals in calculations; round the final answer to the nearest dollar.

Note: If a line in a journal entry isn't required for the transaction, select $"$N$/$A$"$ as the account names and leave the Dr$.$ and Cr$.$ answers blank $($zero$).$

$\backslash$table$[[,$Account Name,Dr$.,$Cr$.],[$a$.,{}^{},,],[,{}^{},,],[$b$.,,,],[,{}^{},,],[$c$.,{}^{},,],[,,,]]$