Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $$1,600.$ The cards are redeemable for meals within one year of the purchase date. Gift cards totaling $$520$ 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:

& $2.$ Record $($in summary form$)$ the $$1,600$ in gift cards sold $($keeping in mind that, in actuality, the company would record each sale of a gift card individually$)$ and the $$520$ in gift cards redeemed. $($Hint$.$ The $$520$ includes a $4\%$ sales tax of $$20.)$

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

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Req $1$ and $2$

Record $($in summary form$)$ the $$1,600$ in gift cards sold $($keeping in mind that, in actuality, the company would record each sale of a gift card individually$)$ and the $$520$ in gift cards redeemed. $($Hint: The $$520$ includes a $4\%$ sales tax of $$20.)($If no entry is required for a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.$)$

Journal entry worksheet