Question 1 of 30
A software company sells a subscription service that charges customers $120 annually, with payments made upfront. At the end of the first quarter, the company recognizes revenue for the first three months of service. If the company has 1,000 active subscriptions, how much deferred revenue will the company report on its balance sheet at the end of the first quarter, and how much revenue will it recognize for that quarter?
Deferred Revenue: $90,000; Revenue Recognized: $30,000
Deferred Revenue: $120,000; Revenue Recognized: $15,000
Deferred Revenue: $60,000; Revenue Recognized: $45,000
Deferred Revenue: $30,000; Revenue Recognized: $90,000

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