If a customer purchases $100 of merchandise during the promotion and therefore receives a free $20 gift card from the company, how should the company account for this transaction?

if the gift card is subsequently redeemed or expires unused, how should the company account for this?

given info: promotion is from August to November
- gift card cannot be redeemed for cash
- management anticipates 50%-85% of the gift cards will be redeemed
-the company has not offered similar promotions in the past
-merchandise margin is 50%
-$20 gift card received after customer spends $100 which can be applied to their next purchase