On December 5, 2010, Super Circuit Store sold gift certificates totaling $4,000. By December 31, 2010 all

Question:

On December 5, 2010, Super Circuit Store sold gift certificates totaling $4,000. By December 31, 2010 all but $750 worth of these certificates had been redeemed for merchandise. Outstanding certificates were then redeemed by January 15, 2011.

Required
1. Prepare journal entries on Super Circuit Store's books to reflect the preceding transactions.
2. How would the gift certificates be reported on Super Circuit's on December 31, 2010?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...