Pasta inn charges an initial fee of $ 15670000 for a franchise, with 314000 paid when the agreement is signed and balance in four annual payments. The present value of the annual payments, discounted at 10%, is $ 1004800. The franchisee has the right to purchase $90000 of kitchen equiment and supplies for $ 41800. An additional part of the initial free is for advertising to be provided by Pasta inn during the next five years. The value of the advertising is $ 1500 a month. Collectibility of the payments is reasonably assured and Pasta inn has performed all the Initial services required by the contract.
Prepare the entry to record the initial franchise fee.