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On January 1, 2025, Mary Johnson signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $50,000. The amount of $9,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,200 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. Mary Johnson's credit rating indicates that she can borrow money at 8% for a loan of this type. Click here to view the factor table. (a) ✓ Your answer is correct. Prepare journal entries for Blossom 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, eg. 1.25124 and the final answer to O decimal places eg. 58,971. List all debit entries before credit entries.) Date Jan 1, 2025 Apr. 1, 2025 Dec 31, 2025 v Account Titles and Explanation Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Unearned Franchise Revenue Franchise Revenue Discount on Notes Receivable Interest Revenue Debit 9000 41000 41740 2619 Credit 8260 41740 41740 2619

On January 1, 2025, Mary Johnson signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $50,000. The amount of $9,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,200 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. Mary Johnson's credit rating indicates that she can borrow money at 8% for a loan of this type. Click here to view the factor table. (a) ✓ Your answer is correct. Prepare journal entries for Blossom 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, eg. 1.25124 and the final answer to O decimal places eg. 58,971. List all debit entries before credit entries.) Date Jan 1, 2025 Apr. 1, 2025 Dec 31, 2025 v Account Titles and Explanation Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Unearned Franchise Revenue Franchise Revenue Discount on Notes Receivable Interest Revenue Debit 9000 41000 41740 2619 Credit 8260 41740 41740 2619

FINANCIAL ACCOUNTING
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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(b) Prepare journal entries for Blossom for 2025-related revenue for this franchise arrangement, assuming that in addition to the franchise rights, Blossom also provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $3,500. (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
Transcribed Image Text:(b) Prepare journal entries for Blossom for 2025-related revenue for this franchise arrangement, assuming that in addition to the franchise rights, Blossom also provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $3,500. (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
On January 1, 2025, Mary Johnson signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $50,000. The amount of $9,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,200 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. Mary Johnson's credit rating indicates that she can borrow money at 8% for a loan of this type. Click here to view the factor table. (a) Your answer is correct. Prepare journal entries for Blossom 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 Jan. 1, 2025 Apr. 1, 2025 Dec 31, 2025 v Account Titles and Explanation Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Unearned Franchise Revenue Franchise Revenue Discount on Notes Receivable Interest Revenue Debit 9000 41000 41740 2619 Credit 8260 41740 41740 2619
Transcribed Image Text:On January 1, 2025, Mary Johnson signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $50,000. The amount of $9,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $8,200 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. Mary Johnson's credit rating indicates that she can borrow money at 8% for a loan of this type. Click here to view the factor table. (a) Your answer is correct. Prepare journal entries for Blossom 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 Jan. 1, 2025 Apr. 1, 2025 Dec 31, 2025 v Account Titles and Explanation Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Revenue Unearned Franchise Revenue Franchise Revenue Discount on Notes Receivable Interest Revenue Debit 9000 41000 41740 2619 Credit 8260 41740 41740 2619
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