On March 31, 2021, a company sells $1,200 of gift cards to customers. The gift cards expire one year from the date of sale. What entry should the company record on March 31, 2021?

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On March 31, 2021, a company sells $1,200 of gift cards to customers. The gift cards expire one year from the date of sale. What entry should the company record on March 31, 2021?

A) Debit Cash, $1,200 credit Sales Revenue, $1,200.

B) Debit Sales Revenue, $1,200 credit Cash, $1,200.

C) Debit Cash, $1,200 credit Deferred Revenue, $1,200.

D) No journal entry is necessary.

Answer: C

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