Joes Cross Fit, an accrual-method taxpayer, provides personal training services. On Dec. 1, Y1, Barbie pays Joes Cross Fit $2,400 cash for 24 months of personal training services ($100/month). Barbies training sessions beginning on Dec. 1, Y1. For tax purposes, how much of the $2,400 must Joes Cross Fit include in gross income in Y2 if Joes elects to defer prepaid income to the maximum extent possible?

Note: For financial accounting purposes, Joes Cross Fit will recognize $100 in income Y1, $1,200 in income Y2, and $1,100 in income Y3. Make sure you understand how the prepaid services income rules for an accrual method taxpayer will result in a book/tax difference in this example.