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Hope Corp. sells a franchise for an initial fee of P1,400,000. A down payment of P400,000 is required, with the balance covered by a P1,000,000, 10% note payable in five equal annual installments.

Hope Corp. sells a franchise for an initial fee of P1,400,000. A down payment of P400,000 is required, with the balance covered by a P1,000,000, 10% note payable in five equal annual installments.

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Hope Corp. sells a franchise for an initial fee of P1,400,000. A down payment of P400,000 is required, with the balance covered by a P1,000,000, 10% note payable in five equal annual installments. If all the material services have been performed and collectability of the notes is reasonably assured, but the refund period has not yet expired, what journal entry is needed to record the transaction? A. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 1,400,000 В. Cash 400,000 Notes Receivable 1,000,000 Unearned Franchise Fees 1,400,000 C. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 400,000 Unearned Franchise Fees 1,000,000 D. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 1,000,000 Unearned Franchise Fees 400,000
Transcribed Image Text:Hope Corp. sells a franchise for an initial fee of P1,400,000. A down payment of P400,000 is required, with the balance covered by a P1,000,000, 10% note payable in five equal annual installments. If all the material services have been performed and collectability of the notes is reasonably assured, but the refund period has not yet expired, what journal entry is needed to record the transaction? A. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 1,400,000 В. Cash 400,000 Notes Receivable 1,000,000 Unearned Franchise Fees 1,400,000 C. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 400,000 Unearned Franchise Fees 1,000,000 D. Cash 400,000 Notes Receivable 1,000,000 Franchise Fees 1,000,000 Unearned Franchise Fees 400,000
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