?

Delect Co. provides repair services for the AZ195 TV set. Customers prepay the fee on the standard one-year service contract. The year 1 and year 2 contracts were identical, and the number of contracts outstanding was substantially the same at the end of each year. However, Delect’s December 31, year 2 deferred revenues’ balance on unperformed service contracts was significantly less than the balance at December 31, year 1. Which of the following situations might account for this reduction in the deferred revenue balance?