MIKE restaurant sold a fast food restaurant

franchise to Irish. The sale agreement, signed

in January 2020 called for a P100.000 down

payment plus two P50,000 annual payments

representing the value of initial franchise

services rendered by MIKE restaurant. In

addition, the agreement required the

franchisee to pay 8% of its gross revenues to

the franchisor. The restaurant opened early in

2020 and its sales for the year amounted to

P750,000. The prevailing rate for the similar

note was 12% (PV factor was 1.6901).

a. How much is the Franchise Revenue for

2020?

b. How much is the Continuing Franchise Fee

for 2020?

C. How much is the TOTAL Revenue for

2020?

d. Journal Entries on January, Upon Opening

of Franchise and December 31