Shea owns an exercise studio and uses the accrual method of accounting for her business.

Shea sells a punch card for $1,000, which grants customers access to 100 Zumba classes over a 36-month period. Shea sells a punch card to Kate in 20x1. Kate takes 30 classes in 20x1;

40 classes in 20x2 and 20 classes in 20x3. Kate was not able to attend the final 10 classes before the card expired. How will Shea report the $1,000 of revenue she earned from Kate’s punch card?

a. $300 in 20x1; $600 in 20x2

b. $300 in 20x1; $400 in 20x2; $300 in 20x3

c. $300 in 20x1; $700 in 20x2

d. $300 in 20x1; $400 in 20x2; $200 in 20x3