Starbrite Pizzas franchises its name to different people across the country. The franchise agreement requires the franchisee to make an initial payment of \($12,000\) and sign a \($32,000\) non-interest-bearing note on the agreement date. The note is to be paid in 4 annual payments of \($8,000\) each beginning 1 year from the agreement date. The initial payment is refundable until the date of opening. Interest rates are assumed to be 10%.The franchiser agrees to make market studies, find a location, train the employees, and perform a few other relatively minor services. The following transactions describe the relationship with Libby Loebig. a franchisee:
2002 July 1 Entered into a franchise agreement.
Sept. 1 Completed a market study at a cost of \($8,000\).
Nov. 15 Found suitable location. Service cost \($1,900\).
2003 Jan. 10 Completed training program for employees, cost \($7,500\).
15 Franchise outlet opened.
July 1 Received first annual payment.
Give Starbrite Pizzas' journal entries in 2002-2003 to record these transactions, including any adjusting entries at December 31, 2002.