On January 1, 2020, Lesley Benjamin signed an agreement, covering 5 years, to operate as a franchisee ofCheyenneInc. for an initial franchise fee of $40,000. The amount of $8,000was paid when the agreement was signed, and the balance is payable in five annual payments of $6,400each, beginning January 1, 2021. 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, 2020. Lesley Benjamin's credit rating indicates that she can borrow money at8% for a loan of this type.

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Prepare journal entries forCheyennefor 2020-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. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1, 2020

Jan. 1, 2020

Apr. 1, 2020

Dec. 31, 2020

Jan. 1, 2020

Apr. 1, 2020

Dec. 31, 2020

eTextbook and Media

List of Accounts

Prepare journal entries forCheyennefor 2020-related revenue for this franchise arrangement, assuming that in addition to the franchise rights,Cheyennealso provides 1 year of operational consulting and training services, beginning on the signing date. These services have a value of $4,400.(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. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1, 2020

Apr. 1, 2020

Dec. 31, 2020

(To record service revenue)

(To record interest revenue)

eTextbook and Media

List of Accounts

Repeat the requirements for part (a), assuming thatCheyennemust 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. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1, 2020

Dec. 31, 2020

(To record franchise revenue)

(To record interest revenue)

Dec. 31, 2020

(To record franchise revenue)

(To record interest revenue)