On January 1, 2025, Barbara Brown signed an agreement, covering 5 years, to operate as a franchisee of Ivanhoe Inc. for an initial franchise fee of $51,000. The amount of $11,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,000 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no future services are required of the franchisor once the franchise commences operations on April 1, 2025. Barbara Brown's credit rating indicates that she can borrow money at 7% for a loan of this type. Click here to view the factor table. Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1, 2025 Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Apr. 1, 2025 Unearned Franchise Revenue Franchise Revenue Dec. 31, 2025 Discount on Notes Receivable Interest Revenue Debit 11000 40000 43802 2296 Credit 7198 43802 43802 2296 Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement, assuming that in addition to the franchise rights, Ivanhoe also provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $3,100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Jan. 1, 2025 Cash Notes Receivable Unearned Franchise Revenue Discount on Notes Receivable Apr. 1, 2025 Unearned Franchise Revenue 11000 40000 Dec. 31, 2025 Discount on Notes Receivable 2296 SUPP

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
On January 1, 2025, Barbara Brown signed an agreement, covering 5 years, to operate as a franchisee of Ivanhoe Inc. for an initial
franchise fee of $51,000. The amount of $11,000 was paid when the agreement was signed, and the balance is payable in five annual
payments of $8,000 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no
future services are required of the franchisor once the franchise commences operations on April 1, 2025. Barbara Brown's credit
rating indicates that she can borrow money at 7% for a loan of this type.
Click here to view the factor table.
Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement. (Credit account titles are automatically indented when the amount
is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to
5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries before credit entries.)
Date
Account Titles and Explanation
Jan. 1, 2025
Cash
Notes Receivable
Discount on Notes Receivable
Unearned Franchise Revenue
Apr. 1, 2025
Unearned Franchise Revenue
Franchise Revenue
Dec. 31, 2025
Discount on Notes Receivable
Interest Revenue
Debit
11000
40000
43802
2296
Credit
7198
43802
43802
2296
Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement, assuming that in addition to the franchise rights, Ivanhoe
also provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $3,100. (Credit account
titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for
the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries
before credit entries. Record journal entries in the order presented in the problem.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2025
Cash
Notes Receivable
Unearned Franchise Revenue
Discount on Notes Receivable
Apr. 1, 2025
Unearned Franchise Revenue
11000
40000
Dec. 31, 2025
Discount on Notes Receivable
2296
SUPP
Transcribed Image Text:On January 1, 2025, Barbara Brown signed an agreement, covering 5 years, to operate as a franchisee of Ivanhoe Inc. for an initial franchise fee of $51,000. The amount of $11,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,000 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no future services are required of the franchisor once the franchise commences operations on April 1, 2025. Barbara Brown's credit rating indicates that she can borrow money at 7% for a loan of this type. Click here to view the factor table. Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries before credit entries.) Date Account Titles and Explanation Jan. 1, 2025 Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Apr. 1, 2025 Unearned Franchise Revenue Franchise Revenue Dec. 31, 2025 Discount on Notes Receivable Interest Revenue Debit 11000 40000 43802 2296 Credit 7198 43802 43802 2296 Prepare journal entries for Ivanhoe for 2025-related revenue for this franchise arrangement, assuming that in addition to the franchise rights, Ivanhoe also provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $3,100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Jan. 1, 2025 Cash Notes Receivable Unearned Franchise Revenue Discount on Notes Receivable Apr. 1, 2025 Unearned Franchise Revenue 11000 40000 Dec. 31, 2025 Discount on Notes Receivable 2296 SUPP
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education