On January $1,2025,$ Maria Wilson signed an agreement, covering $5$ years, to operate as a franchisee of Sheridan Inc. for an initial

franchise fee of $$40,000.$ The amount of $$13,000$ was paid when the agreement was signed, and the balance is payable in five annual

payments of $$5,400$ each, beginning January $1,2026.$ The agreement provides that the down payment is nonrefundable and that no

future services are required of the franchisor once the franchise commences operations on April $1,2025.$ Maria Wilson's credit rating

indicates that she can borrow money at $8\%$ for a loan of this type.

Click here to view the factor table.

$($a$)$

Prepare journal entries for Sheridan for $2025-$related revenue for this franchise arrangement. $($Credit account titles are

automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No entry" for the account titles

and enter $0$ for the amounts. Round present value factor calculations to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and the final answer to $0$ decimal

places e$.$g$.58,971.$ List all debit entries before credit entries.$)$

Date

Account Titles and Explanation

Debit

Credii

Jan. $1,2025$

Cash

Notes Receivable

Discount on Notes Receivable

Unearned Franchise Revenue

Unearned Franchise Revenue

Franchise Revenue

Discount on Notes Receivable

Interest Revenue