Frozen Delight, Inc. charges an initial franchise fee of $87,000for the right to operate as a franchisee of Frozen Delight. Of this amount, $22,000is collected immediately. The remainder is collected in 4 equal annual installments of $16,250each. These installments have a present value of $33,328. There is reasonable expectation that the down payment may be refunded and substantial future services be performed by Frozen Delight, Inc.

Prepare the journal entry required by Frozen Delight to record the franchise fee. please give explanation