What changes are made in recording of initial franchise fee


Response to the following problem:

What changes are made in the franchisor's recording of the initial franchise fee when the franchise agreement:

(a) Contains an option allowing the franchisor to purchase the franchised outlet, and it is likely that the option will be exercised?

(b) Allows the franchisee to purchase equipment and supplies from the franchisor at bargain prices?

 

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Managerial Accounting: What changes are made in recording of initial franchise fee
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