Question
On December 1, 20x7, Dub Inc. authorized Smash to operate as a franchise for an initial franchise fee of P3,400,000. P900,000 was received upon signing
On December 1, 20x7, Dub Inc. authorized Smash to operate as a franchise for an initial franchise fee of P3,400,000. P900,000 was received upon signing the contract, and the balance is to be paid by a non-interest bearing note, due in five equal annual installments beginning December 31, 20x8. Prevailing market rate is 12%. PV factor is 3.60478. The down payment is nonrefundable and it represents a fair measure of the services already performed by Dub, however, with regards to the balance, substantial future services are still required. How much is the deferred franchise revenue to be recognized as of December 31, 20x7
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