The Bigelow Health Club sells annual memberships to a prestigious club. The terms of the contracts are that customers are required to pay an up$-$front non$-$refundable fee of $$200,$ and then a monthly fee of $$50,$ with the first month due immediately, for the year for a total cost of $$800$ to join the club. On February $1\mathrm{ 2}024$ Bigelow sold $10$ memberships.

Prepare the journal entry for the sale on Feb $1$ and the adjusting entry on Feb $29,2024$ to report revenue. Explain what revenue Bigelow will report in the month, and over the course of the year.  

 

Assume that $100\%$ of the members of the Bigelow club renew their memberships for $3$ years. How does that change the revenue reported in February?

Answer rating: 100% (QA)

1 Journal Entry on February 1 2024 Feb 1 2024 Cash 7000 Unearned Revenue Deferred Revenue 7000 Expla... View the full answer