Assuming that the initial services to be performed by Flapper Jack's subsequent to the signing are substantial and that collection of the receivable is reasonably assured,the journal entry required at signing would include a credit to:

Question

Quizplus · Accepted Answer

The initial services are substantial and collection is assured, so the entire franchise fee of $36,000 is recorded as unearned revenue until the services are performed.

Assuming That the Initial Services to Be Performed by Flapper