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Problem - Lancaster BP Corp. Entered into a franchise agreement with Sacramento Site on January 1, 2016. The initial franchise fee is 3,500,000 and the 500,000 of which is payable upon signing the contract and the balance is covered by a non-interest-bearing note and payable in 4 equal annual instalmehts starting on Dec 31,2016. The contract also includes a 5% royalty fee based on average sales for the year. However, according to the agreement the down payment is non-refundable. It is estimated that Sacramento can borroyilr at the rate of 296. The franchisee commenced its operations on June 30. For the year 2016, it reported an average monthly sale of 80,000. The collectability of the said note is reasonably certain. Make all the journal entries from the start of agreement [January 1, 2016] up to December 31, 2016.
crispy crust pizzeria is a privately owned restaurant chain with over 750 locations nationwide. the company has
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