Intermediate Accounting: BE18-13 Frozen Delight, Inc. charges an initial franchise fee

Intermediate AccountingBE18-13
Frozen Delight, Inc. charges an initial franchise fee of $78,500 for the right to operate as a franchisee of Frozen Delight. Of this amount, $28,700 is collected immediately. The remainder is collected in four equal annual installments of $12,450 each. These installments have a present value of $41,570. As part of the total franchise fee, Frozen Delight also provides training (with a fair value of $3,200) to help franchisees get the store ready to open. The franchise agreement is signed on April 1, 2014, training is completed, and the store opens on July 1, 2014.
 
Prepare the journal entries required by Frozen Delight in 2014.
 
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