On January 1, 2021, ABC Corporation, a music record label, licensed to a customer the original version of a classical hit. The customer, a consumer products company, has the right to use the asset in all commercials, including television, radio and online advertisements for 3 years in the Philippines. In exchange for providing the license, ABC receives a consideration of P60,000 every quarter-end. The contract does not include any other goods or services to be provided by ABC. The contract is non-cancellable. The license is transferred to the customer on January 1, 2021. The appropriate discount rate is 8%. What amount of franchise revenue should be reported in 2021?
On January 1, 2021, ABC Corporation, a music record label, licensed to a customer the original version of a classical hit. The customer, a consumer products company, has the right to use the asset in all commercials, including television, radio and online advertisements for 3 years in the Philippines. In exchange for providing the license, ABC receives a consideration of P60,000 every quarter-end. The contract does not include any other goods or services to be provided by ABC. The contract is non-cancellable. The license is transferred to the customer on January 1, 2021. The appropriate discount rate is 8%. What amount of franchise revenue should be reported in 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, ABC Corporation, a music record label, licensed to a customer the original version of a classical hit. The customer, a consumer products company, has the right to use the asset in all commercials, including television, radio and online advertisements for 3 years in the Philippines. In exchange for providing the license, ABC receives a consideration of P60,000 every quarter-end. The contract does not include any other goods or services to be provided by ABC. The contract is non-cancellable. The license is transferred to the customer on January 1, 2021. The appropriate discount rate is 8%. What amount of franchise revenue should be reported in 2021?
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