Sheridan Crossburgers Inc. charges an initial franchise fee of $$75,000.$ Upon the signing of the agreement $($which covers $3$ years after

commencement of operations$),$ a payment of $$30,000$ is due. Thereafter, $3$ annual payments of $$15,000$ are required. The credit rating

of the franchisee is such that it would have to pay interest at $9\%$ to borrow money. The franchise agreement is signed on May $1,2025,$

and the franchise commences operation on July $1,2025$

Click here to view the factor table.

Prepare the journal entries in $2025$ for the franchisor under the following assumptions.

a$.$ No future services are required by the franchisor once the franchise starts operations.

b$.$ The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the

franchise.

c$.$ The total franchise fee includes training services $($with a value of $$2,900)$ for the period leading up to the franchise opening

and for $2$ months following opening.

$($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, eg$.1\mathrm{.}25124$ and the final

answer to $0$ decimal places e$.$g$.58,971.$ List all debit entries before credit entries. Record journal entries in the order presented in the problem.$)$

No$.$

Date

$($a$)$

$($b$)$

$($c$)$

eTextbook and Media

List of Accounts

Account Titles and Explanation

DebitSheridan Crossburgers Inc. charges an initial franchise fee of $$75,000.$ Upon the signing of the agreement $($which covers $3$ years after commencement of operations$),$ a payment of $$30,000$ is due. Thereafter, $3$ annual payments of $$15,000$ are required. The credit rating of the franchisee is such that it would have to pay interest at $9\%$ to borrow money. The franchise agreement is signed on May $1,2025,$ and the franchise commences operation on July $1,2025.$

Click here to view the factor table.

Prepare the journal entries in $2025$ for the franchisor under the following assumptions.

a$.$ No future services are required by the franchisor once the franchise starts operations.

b$.$ The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise.

c$.$ The total franchise fee includes training services $($with a value of $$2,900)$ for the period leading up to the franchise opening and for $2$ months following opening.

$($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, eg$.1\mathrm{.}25124$ and the final answer to $0$ decimal places e$.$g$.58,971.$ List all debit entries before credit entries. Record journal entries in the order presented in the problem.$)$