authorized J. Guerrero to operate as a franchisee for an initial franchisee fee of P1,500,000. Of this amount, P600,000 was received upon signing the agreement and the balance, represented by a note, is due in three annual payments, appropriately discounted is P720,000. According to the agreement, the non-refundable down payment represents a fair measure of the services already performed by Crispy Cream however, substantial future services are required of Crispy Cream. Collectability of the note is reasonably certain. On December 31, 2016, what entry should Crispy Cream record for the receipt of the initial franchise fee? a. Cash 600,000 Notes Receivable 900,000 Unearned interest income 180,000 Franchise Revenue 600,000 Unearned Franchise fees 720,000

authorized J. Guerrero to operate as a franchisee for an initial franchisee fee of P1,500,000. Of this amount, P600,000 was received upon signing the agreement and the balance, represented by a note, is due in three annual payments, appropriately discounted is P720,000. According to the agreement, the non-refundable down payment represents a fair measure of the services already performed by Crispy Cream however, substantial future services are required of Crispy Cream. Collectability of the note is reasonably certain. On December 31, 2016, what entry should Crispy Cream record for the receipt of the initial franchise fee? a. Cash 600,000 Notes Receivable 900,000 Unearned interest income 180,000 Franchise Revenue 600,000 Unearned Franchise fees 720,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 7C: On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial...

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