How much should rm record as unearned franchise fees

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Problem 1: On December 31, 2021, RM Company authorized GINNY to operate as a franchisee for an initial franchise fee of $150,000. Of this amount, $60,000 was received upon signing the agreement, and the balance, represented by a note, is due in three annual payments of $30,000 each, beginning December 31, 2022. The present value on December 31, 2021 of the 3 annual payments appropriately discounted is $72,000. According to the agreement, the nonrefundable down payment represents a fair measure of the services already performed by RM, however, substantial future services are required of RM. Collectability of the note is reasonably certain. On December 31, 2021, how much should RM record as unearned franchise fees in respect of the GINNY franchise?

A. 150,000

B. 90,000

C. 72,000

D. 0

Reference no: EM132940079

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