The Rink Offers Annual $200 Memberships That Entitle Members to Unlimited

question 115

Essay

The Rink offers annual $200 memberships that entitle members to unlimited use of ice-skating facilities and locker rooms. Each new membership also entitles the member to receive ten "20% off a $5 meal" coupons that are redeemable at the Rink's snack bar. The Rink estimates that approximately 80% of the coupons will be redeemed, and that, if the coupons weren't redeemed, $5 meals still would be discounted by 5% because of ongoing promotions.
-Prepare the journal entry to recognize the sale of a new membership. Clearly identify revenue or deferred revenue associated with each performance obligation.

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Definitions:

Recall

The act of retrieving information or memories from the past without being explicitly prompted to do so.

Recognition

The process of identifying a previously encountered stimulus or piece of information from among several.

Recall

The act of retrieving information or memories from the past without the aid of cues.

Encoding

The initial learning of information; the process by which information enters our memory system.