The Rink offers annual $300 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten 30% off a $5 meal coupons that are redeemable at the Rinks snack bar. The Rink estimates that approximately 75% of the coupons will be redeemed, and that, if the coupons werent redeemed, $5 meals still would be discounted by 6% because of ongoing promotions.

Problem 5-240

Required:

Prepare the journal entry to recognize the sale of a new membership. Clearly identify revenue or deferred revenue associated with each performance obligation