Homework Answers
Answer:
a.)
| Date | Account Titles & Explanation | Debit ($) | Credit ($) |
| 1-May 2017 | Cash | $30,000 | |
| Notes Receivable ($75,000-$30,000) | $45,000 | ||
| Discount on Notes Receivable(15000*3)-(15000*2.53129) | $7,031 | ||
| Unearned Franchise Revenue | $67,969 | ||
| 1-July | Unearned Franchise Revenue | $67,969 | |
| Franchise Revenue | $67,969 |
Note: PV for n = 3 i = 9% = 2.53129
b.)
| Date | Account Titles & Explanation | Debit ($) | Credit ($) |
| 1-May 2017 | Cash | $30,000 | |
| Notes Receivable ($75,000-$30,000) | $45,000 | ||
| Discount on Notes Receivable (15000*3)-(15000*2.53129) | $7031 | ||
| Unearned Franchise revenue | $67,969 | ||
| 31-Dec | Unearned Franchise Revenue | $15,104 | |
| Franchise revenue (67969 /3)*8/12 | $15,104 |
c.)
| Date | Account Titles & Explanation | Debit ($) | Credit ($) |
| 1-May 2017 | Cash | $30,000 | |
| Notes receivable ($75,000-$30,000) | $45,000 | ||
| Discount on Notes receivable (15000*3)-(15000*2.53129) | $7,031 | ||
| Unearned Franchise revenue | $65,069 | ||
| Unearned Service revenue (Training) | $2,900 | ||
| 1-Jul | Unearned Service revenue (training) | $1,450 | |
| Unearned Franchise Revenue | $65,069 | ||
| franchise revenue | $65,069 | ||
| Service revenue (training) | $1,450 | ||
| 1-Jul | Unearned Service revenue (training) | $1,450 | |
| Service revenue | $1,450 |
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66000
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$147000
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rating of the franchisee is such that it would have to pay interest
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covering 5 years, to operate as a franchisee of Pronghorn Inc. for
an initial franchise fee of $46,000. The amount of $9,000 was paid
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annual payments of $7,400 each, beginning January 1, 2021. The
agreement provides that the down payment is nonrefundable and that
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franchise commences operations on April...
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