Sonny's Dry Cleaners,Inc.charges an initial franchise fee of $195,000.When the agreement is signed,a payment of $75,000 is due,followed by four annual payments of $30,000 at the end of each period.Sonny's normal borrowing rate is 12%.Prepare the entries to record the initial franchise fee on the books of Sonny's under each of the following circumstances.

Question

Sonny's Dry Cleaners,Inc.charges an initial franchise fee of $195,000.When the agreement is signed,a payment of $75,000 is due,followed by four annual payments of $30,000 at the end of each period.Sonny's normal borrowing rate is 12%.Prepare the entries to record the initial franchise fee on the books of Sonny's under each of the following circumstances.
Sonny's Dry Cleaners,Inc.charges an initial franchise fee of $195,000.When the agreement is signed,a payment of $75,000 is due,followed by four annual payments of $30,000 at the end of each period.Sonny's normal borrowing rate is 12%.Prepare the entries to record the initial franchise fee on the books of Sonny's under each of the following circumstances.

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The Answer of Sonny's Dry Cleaners,Inc.charges an initial franchise fee of $195,000.When the agreement is signed,a payment of $75,000 is due,followed by four annual payments of $30,000 at the end of each period.Sonny's normal borrowing rate is 12%.Prepare the entries to record the initial franchise fee on the books of Sonny's under each of the following circumstances.