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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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