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Question - On January 1, 2020, Lesley Benjamin signed an agreement, covering 5 years, to operate as a franchisee of Cheyenne Inc. for an initial franchise fee of $40,000. The amount of $8,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $6,400 each, beginning January 1, 2021. 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, 2020. Lesley Benjamin's credit rating indicates that she can borrow money at 8% for a loan of this type. Prepare journal entries for Cheyenne for 2020-related revenue for this franchise arrangement.
Assets Liabilities Beginning of Year: $28,000 $15,000 End of Year: $61,000 $25,000. What is the equity at the beginning of the year
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