Question

Texas Roadhouse opened a new restaurant in October. During its first three months of operation, the restaurant sold gift cards in various amounts totaling $2,600. 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.

Record 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.)

Answer 1

No.	General Journal	Debit	Credit
1	Cash	2600
	Unearned revenue		2600
	(To record gift cards sold)
2	Unearned revenue	832
	Sales tax payable		32
	Sales revenue		800
	(To record gift cards redeemed)