At the beginning of current year, Outlandish Company entered into a franchise agreement with Jollibee Company to sell - Jollibee products for an indefinite period. The agreement provides for an initial fee of P20,000,000, P5,000,000 down upon signing of the contract and the balance in four equal annual payments every year-end. The entity signed 10% interest-bearing note for the balance. The collection of the note is reasonably assured.
At the beginning of current year, Outlandish Company entered into a franchise agreement with Jollibee Company to sell - Jollibee products for an indefinite period. The agreement provides for an initial fee of P20,000,000, P5,000,000 down upon signing of the contract and the balance in four equal annual payments every year-end. The entity signed 10% interest-bearing note for the balance. The collection of the note is reasonably assured.
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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