In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the sale of the gift card in January?

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In January 2021, Summit Department Store sells a gift card for $50 and receives cash. In February, 2021, the customer comes back and spends $20 of the gift card to purchase a water bottle. What would be the appropriate journal entry for the sale of the gift card in January?

A) Debit Cash, $50 credit Sales Revenue, $50.

B) Debit Cash, $50 credit Deferred Revenue, $50.

C) Debit Sales Revenue, $20 credit Cash, $20.

D) No journal entry is necessary.

Answer: B

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