mmoth Publishing, Inc. owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed. Required: (a) How many performance obligations are in a single subscription contract? (b) Prepare the journal entry to account for one
Mammoth Publishing, Inc. owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $96. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 25% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $84 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed.
Required:
(a) How many performance obligations are in a single subscription contract?
(b) Prepare the journal entry to account for one new subscription of “Nova Health,” clearly identifying the revenue or deferred revenue associated with each performance obligation.
of performance obligations: 2
Journal entry worksheet
Note: Enter debits before credits.
|
|
|||||||||||||||||||||||||||||
|
Step by step
Solved in 3 steps
