Saisaki Corporation grants a franchise to Mity for an initial franchise fee of P 1,000,000. The agreement provides that Saisaki has the option within one year to acquire franchisee’s business, and it seems certain that Saisaki will exercise this option. On Saisaki’s books, how should the initial fee be recorded?Deferred and treated as reduction in Saisaki investment when the option is exercisedRealized revenueExtraordinary revenueDeferred revenue to be amortized

The initial franchise fee has to be recognized as revenue only upon the performance of all…

Answered: initial franchise fee

Business

Accounting

initial franchise fee

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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