On December 31, Katie Inc. should <u>credit </u><u>Membership Revenue</u><u> with </u><u>$1,800</u>.
<h3>What is Deferred Revenue?</h3>
Deferred revenue is recorded as a liability in Katie Inc.'s balance sheet because it represents a prepayment by its customer for membership services that are yet to be delivered. By December 31, Katie would have earned 9 months out of the 12 months subscription.
<h3>Data Analysis:</h3>
April 1, Cash $2,400 Deferred Revenue $2,400
December 31 Deferred Revenue $1,800 Membership Revenue $1,800 ($2,400 x 9/12).
Thus, Katie Inc. should <u>credit its </u><u>Membership Revenue</u><u> account </u>on December 31 with $1,800.
Learn more about deferred revenue at brainly.com/question/24852569