Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,400. The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $832 were presented for redemption during the first three months of operation prior to year-end on December 31. The sales tax rate on restaurant sales is 4%, assessed at the time meals (not gift cards) are purchased. Texas Roadhouse will remit sales taxes in January.

Required:

1. & 2. Record (in summary form) the $2,400 in gift cards sold (keeping in mind that, in actuality, the firm would record each sale of a gift card individually) and the $832 in gift cards redeemed. (Hint: The $832 includes a 4% sales tax of $32.) (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1) Record the cash received for the gift cards

Transaction	General Ledger	Debit	Credit
1

2) Record the redemption of the gift cards

Transaction	General Ledger	Debit	Credit
2

3. Determine the balance in the Deferred Revenue account (remaining liability for gift cards) Texas Roadhouse will report on the December 31 balance sheet.

Deferred Revenue