L&B Inc. offers gym services for its clients. The annual membership fee per customer is...
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Accounting
L&B Inc. offers gym services for its clients. The annual membership fee per customer is $1,200 which includes access to all the facility activities. In addition, L&B also charges a $50 of registration fee which is non-refundable and must be paid at the inception of the contract.
Required
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Please explain your reasoning if this registration fee of $50 should be considered as a
separate performance obligation from the annual membership fee to cause a separate
contract.
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Please make the journal entry for the revenue amount to be recognized per month by L&B
when an annual membership is sold. (Assume that the considerations are received in cash.)
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