Seven-Eleven, Inc. is in the business of selling small retail grocery outlets on a franchise basis. Ms. Gene Lim signed an agreement for such a franchise on January 12, 2020 for a term of twenty years. The contract has the following provisions, which were agreed between the two parties: (a) An initial franchise fee of P750,000 is to be paid in the following manner: P150,000 in cash at the beginning of the franchise and the balance is a non-interest-bearing note for P600,000. The note is to be paid in five equal installments, each payable on the anniversary date of the opening. (b) of the initial franchise fee, a portion is for equipment and fixtures, to which title is transferred at signing of the agreement, and a portion is for inventory to be supplied one month before the opening date of July 1, 2020. The cost of equipment and fixtures is P50,000 and could be sold to yield a 20% gross profit if sold on the open market. The retal value of the inventory is P80,000, which includes a 15% gross profit. (c) Continuing fees are to be three-fourths of one percent of monthly sales. Monthly sales are expected to be P330,000 for the first four years, P450,000 for the next 12 years, and P500,000 for the last four years. (d) Continuing costs for this franchise will be P3,000 per month for the entire contract period. This amount represents the cost of advertisements, and supervisions. The , market value of these services is P4,000. (e) Initial costs of services will total P70,000, and will be incurred prior to the opening. (f) The franchisor has the option to discount the non-interest bearing note at any time during the payment period. Normally, notes are discounted immediately, at rate of 10% Required: Assuming that the opening occurs as scheduled, and that the note is immediately discounted, prepare the appropriate schedules to determine the timing and amounts of income to be recognized by Seven-Eleven, Inc. through December 31, 2020. Seven-Eleven, Inc. is in the business of selling small retail grocery outlets on a franchise basis. Ms. Gene Lim signed an agreement for such a franchise on January 12, 2020 for a term of twenty years. The contract has the following provisions, which were agreed between the two parties: (a) An initial franchise fee of P750,000 is to be paid in the following manner: P150,000 in cash at the beginning of the franchise and the balance is a non-interest-bearing note for P600,000. The note is to be paid in five equal installments, each payable on the anniversary date of the opening. (b) of the initial franchise fee, a portion is for equipment and fixtures, to which title is transferred at signing of the agreement, and a portion is for inventory to be supplied one month before the opening date of July 1, 2020. The cost of equipment and fixtures is P50,000 and could be sold to yield a 20% gross profit if sold on the open market. The retal value of the inventory is P80,000, which includes a 15% gross profit. (c) Continuing fees are to be three-fourths of one percent of monthly sales. Monthly sales are expected to be P330,000 for the first four years, P450,000 for the next 12 years, and P500,000 for the last four years. (d) Continuing costs for this franchise will be P3,000 per month for the entire contract period. This amount represents the cost of advertisements, and supervisions. The , market value of these services is P4,000. (e) Initial costs of services will total P70,000, and will be incurred prior to the opening. (f) The franchisor has the option to discount the non-interest bearing note at any time during the payment period. Normally, notes are discounted immediately, at rate of 10% Required: Assuming that the opening occurs as scheduled, and that the note is immediately discounted, prepare the appropriate schedules to determine the timing and amounts of income to be recognized by Seven-Eleven, Inc. through December 31, 2020