1. On January 1, 2021 Carvel, Inc. entered into a franchise agreement with a company allowing the company to do business under Carvel Treats’ name. Carvel Treats had name. Carvel had performed substantially all required services by January 1, 2021, and the franchisee paid the initial franchise fee of $980,000 in full on that date. The franchise agreement specifies that the franchisee must pay a continuing franchise fee of $84,000 annually, of which 20% must be spent on advertising by Carvel. 
2. What entry should Carvel make on January 1, 2021 to record receipt of the initial franchise fee and the continuing franchise fee for 2021?