70.2K

Verified Solution

Link Copied!

A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $$108.$ Customers prepay their

subscriptions and receive $220$ issues over the year. To attract more subscribers, the company offered new subscribers the ability to

pay $$110$ for an annual subscription that also would include a coupon to receive a $40\%$ discount on a one$-$hour ride through Central

Park in a horse$-$drawn carriage. The list price of a carriage ride is $$100$ per hour. The company estimates that approximately $30\%$ of the

coupons will be redeemed.

Required:

How much revenue should Manhattan Today recognize upon receipt of the $$110$ subscription price?

How many performance obligations exist in this contract?

Prepare the journal entry to recognize sale of $11$ new subscriptions, clearly identifying the revenue or deferred revenue

associated with each performance obligation.

Complete this question by entering your answers in the tabs below.

Req $1$ and $2$

Prepare the journal entry to recognize sale of $11$ new subscriptions, clearly identifying the 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.

Journal entry worksheet

A

Record the sale of $11$ new subscriptions.

Note: Enter debits before credits.

Answer & Explanation Solved by verified expert

See Answer