A New York City daily newspaper called Manhattan Today charges an annual subscription fee of $486. Customers prepay their subscriptions and receive 250 issues over the year. To attract more subscribers, the company offered new subscribers the ability to pay $460 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 $450 per hour. The company estimates that approximately 30% of the coupons will be redeemed.

1. How much revenue should Manhattan Today recognize upon receipt of the $460 subscription price?

2. How many performance obligations exist in this contract?

I determined this was 2.

3. Prepare the journal entry to recognize sale of 13 new subscriptions, clearly identifying the revenue or unearned revenue associated with each performance obligation