Emu and You, a New Fast-Food Chain, Sells Exclusive Franchises

question 178

Essay

Emu and You, a new fast-food chain, sells exclusive franchises for $25,000. For this fee, franchisees receive training, assistance on site selection, assistance during the construction phase, and promotional considerations for the grand opening, including a visit by Ernie Emu. There is also a $500 per month continuation fee for institutional advertising and accounting services after the store is open for business. On March 20 of the current year, Emu and You sold a franchise to I.M. Stuck for the standard fee. The franchisor received a 20% down payment and a 10%, four-year note for the balance. On June 15, Stuck had his grand opening and Emu and You had met all requirements for substantial performance. On July 15, Emu and You received $500 for the continuing fee.
Required: Prepare the appropriate journal entries for Emu and You at March 20, June 15, and July 15. Ignore any interest accrual.

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Definitions:

Chart Data

Information in numerical form that can be used to create graphical representations in a chart.

Outline View

A display option in productivity software that shows the structured overview or hierarchy of a document, presentation, or project.

Bulleted List

A list format in documents that uses bullet points to organize items.

Outline Pane

A feature within many applications that displays a document's structure in a simplified, easy-to-navigate format.