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Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor receives $ 6 4 0 , 0 0 0
Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor receives $ in exchange for satisfying the following separate performance obligations: franchisees have a fiveyear right to operate as a Monitor Muffler retail establishment in an exclusive sales territory, franchisees receive initial training and certification as a Monitor Mechanic, and franchisees receive a Monitor Muffler building and necessary equipment. The standalone selling price of the initial training and certification is $ and $ for the building and equipment. Monitor estimates the standalone selling price of the fiveyear right to operate as a Monitor Muffler establishment using the residual approach.
Monitor received $ on July from Perkins and accepted a note receivable for the rest of the franchise price. Monitor will construct and equip Perkins's building and train and certify Perkins by September and Perkins's fiveyear right to operate as a Monitor Muffler establishment will commence on September as well.
Required:
What amount would Monitor calculate as the standalone selling price of the fiveyear right to operate as a Monitor Muffler retail establishment?
What journal entry would Monitor record on July to reflect the sale of a franchise to Dan Perkins?
H
Journal entry worksheet
Record the sale of a franchise to Dan Perkins on July
Note: Enter debits before credits.
tableDateGeneral Journal,Debit,CreditJuly ow much revenue would Monitor recognize in the year ended December with respect to its franchise arrangement with Perkins? Ignore any interest on the note receivable.
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