On January 1, 2017, Lesley Benjamin signed an agreement, covering 5 years, to operate as a franchisee of Sandhill Inc. for an initial franchise fee of $48,000. The amount of $11,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $7,400 each, beginning January 1, 2018. 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, 2017. Lesley Benjamins credit rating indicates that she can borrow money at 12% for a loan of this type.

Repeat the requirements for part (a), assuming that Sandhill must provide services to Benjamin throughout the franchise period to maintain the franchise value. (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. 251 24 and the final answer to 0 decimal places e.g. 58,971.) Credit Date Account Titles and Explanation Debit Cash Jan. 1, 2017 11000 Notes Receiva ble 37000 10325 Discount on Notes Receivable Contract Liability 37675 Dec. 31, 2017 Unearned Franchise Revenue Franchise Revenue (To record service revenue) Discount on Notes Receivable 3201 Interest Revenue 3201 (To record interest revenue)