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Calatagan Corp. acquired a fast food franchise for a P50,000 cash down payment and in addition gave a P150,000, ones a year, noninterest-bearing note payable.

Calatagan Corp. acquired a fast food franchise for a P50,000 cash down payment and in addition gave a P150,000, ones a year, noninterest-bearing note payable. The implicit interest rate is 12 percent.Calatagan also agreed to pay the franchiser P100,000 per year for the next 10 years for promotional campaigns, accounting, and related services by the franchiser.

What should Catalagan record as the cost of the franchise?

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