The Rink offers annual $150.memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "30% off a $5 meal" coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 75% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 6% because of ongoing promotions. Required: Prepare the journal entry to recognize the sale of a new membership. Clearly identify revenue or deferred revenue associated with each performance obligation. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.
The Rink offers annual $150.memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "30% off a $5 meal" coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 75% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 6% because of ongoing promotions. Required: Prepare the journal entry to recognize the sale of a new membership. Clearly identify revenue or deferred revenue associated with each performance obligation. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to 2 decimal places.
Chapter16: Tax Research
Section: Chapter Questions
Problem 78AM
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