I have a client that pays musicians in gift certificates that can be redeemed at the club. What would be the J/E's for when the GC is issued and when it is redeemed?

Create a liability account called gift certificates
create a service item named gift cert and link it to the liability account

use that item on customer credit memo when you issue the GC

when they buy something and pay for it with the GC, list what they buy, and apply the customer credit

Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.