Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor recelves $600,000 in exchange for satisfying the following separate performance obligations: (1) franchisees have a five-year right to operate as a Monitor Muffler retall establishment in an exclusive sales territory, (2) franchisees recelve initial training and certification as a Monitor Mechanic, and (3) franchisees receive a Monitor Muffler building and necessary equipment. The stand-alone selling price of the initial training and certification is $15,000, and $450,000 for the bullding and equipment. Monitor estimates the stand-alone selling price of the flue-year right to operate as a Monitor Muffler establishment using the residual approach. Monitor received $75,000 on July 1, 2021, from Perkins and accepted a note receivable for the rest of the franchise price. Monitor vill construct and equip Perkins's buliding and train and certify Perkins by September 1, and Perkins's five-year right to operate as a Manitor Muffler establishment will commence on September 1 as well. Required: 1. What amount would Monitor calculate as the stand-alone selling price of the five-year right to operate as a Monitor Muffler retail establishment? 2. What journal entry would Monitor record on July 1, 2021, to reflect the sale of a franchise to Dan Perkins? 3. How much revenue would Monitor recognize in the year ended December 31,2021 , with respect to its franchise arrangement with Perkins? (Ignore any interest on the note receivable.) Answer is not complete. Complete this question by entering your answers in the tabs below. What joumal entry would Monitor record on July 1, 2021, to reflect the sale of a franchise to Dan Perkins? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Monitor Muffler selis franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor recelves $600,000 in exchange for satisfying the following separate performance obligations: (1) franchisees have a five-year right to operate as a Monitor Muffler retall establishment in an exclusive sales territory, (2) franchisees recelve initial training and certification as a Monitor Mechanic, and (3) franchisees receive a Monitor Muffler building and necessary equipment. The stand-alone selling price of the initial training and certification is $15,000, and $450,000 for the building and equipment. Monitor estimates the stand-alone selling price of the flue-year right to operate as a Monitor Muffler establishment using the residual approach. Monitor received $75,000 on July 1, 2021, from Perkins and accepted a note receivable for the rest of the franchise price. Monitor will construct and equip Perkins's buliding and train and certify Perkins by September 1, and Perkins's five-year right to operate as a Monitor Muffler establishment will commence on September 1 as well. Required: 1. What amount would Monitor calculate as the stand-alone selling price of the five-year right to operate as a Monitor Muffler retail establishment? 2. What joumal entry would Monitor record on July 1, 2021, to reflect the sale of a franchise to Dan Perkins? 3. How much revenue would Monitor recognize in the year ended December 31,2021 , with respect to its franchise arrangement with Perkins? (lgnore any interest on the note receivable.) x Answer is not complete. Complete this question by entering your answers in the tabs below. How much revenue would Monitor recognize in the year ended December 31,2021 , with respect to its franchise arrangement with Perkins? (Ignore any interest on the note receivable.) (Do not round intermediate calculations.)
