View Policies Current Attempt in Progress Crane Diners Inc. charges an initial franchise fee of $193000 broken down as follows: Rights to trade name, market area, and proprietary know-how $83000 Training services 37000 Equipment (cost of $34000) 73000 Total initial franchise fee $193000 Upon signing the agreement, a payment of $83000 is due. Thereafter, two annual payments of $53000 are required. The credit rating of the franchisee is such that it would have to pay interest of 8% to borrow money. The franchise agreement is signed on August 1, 2024, and the franchise commences operation on November 1, 2024. Assume that the total training fees include training services for the period leading up to the franchise opening ($20500 value) and for 3 months following opening. Crane Diners' journal entry on August 1, 2024 would include O a credit to Unearned Service Revenue for $37000. O a credit to Unearned Service Revenue for $16500. O a debit to Sales Revenue for $73000. O a debit to Unearned Franchise Revenue for $83000.
View Policies Current Attempt in Progress Crane Diners Inc. charges an initial franchise fee of $193000 broken down as follows: Rights to trade name, market area, and proprietary know-how $83000 Training services 37000 Equipment (cost of $34000) 73000 Total initial franchise fee $193000 Upon signing the agreement, a payment of $83000 is due. Thereafter, two annual payments of $53000 are required. The credit rating of the franchisee is such that it would have to pay interest of 8% to borrow money. The franchise agreement is signed on August 1, 2024, and the franchise commences operation on November 1, 2024. Assume that the total training fees include training services for the period leading up to the franchise opening ($20500 value) and for 3 months following opening. Crane Diners' journal entry on August 1, 2024 would include O a credit to Unearned Service Revenue for $37000. O a credit to Unearned Service Revenue for $16500. O a debit to Sales Revenue for $73000. O a debit to Unearned Franchise Revenue for $83000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:View Policies
Current Attempt in Progress
Crane Diners Inc. charges an initial franchise fee of $193000 broken down as follows:
Rights to trade name, market area, and proprietary know-how
$83000
Training services
37000
Equipment (cost of $34000)
73000
Total initial franchise fee
$193000
Upon signing the agreement, a payment of $83000 is due. Thereafter, two annual payments of $53000 are required. The credit rating
of the franchisee is such that it would have to pay interest of 8% to borrow money. The franchise agreement is signed on August 1,
2024, and the franchise commences operation on November 1, 2024. Assume that the total training fees include training services for
the period leading up to the franchise opening ($20500 value) and for 3 months following opening. Crane Diners' journal entry on
August 1, 2024 would include
O a credit to Unearned Service Revenue for $37000.
O a credit to Unearned Service Revenue for $16500.
O a debit to Sales Revenue for $73000.
O a debit to Unearned Franchise Revenue for $83000.
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