On January 1, 2025, Sarah Young signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $37,000. The amount of $7,000 was paid when the

agreement was signed, and the balance is payable in five annual payments of $6,000 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. Sarah Young's credit rating indicates that she can borrow money at 11% for a loan of this type.

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(a)

Prepare journal entries for Blossom 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 O for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to O decimal places e.g. 58,971. List all

debit entries before credit entries.)

Date

Account Titles and Explanation

Debit

Credit