On January 1, 2014, Heart Company signed an agreement to operate as a franchisee of Ace Company for an initial franchise fee of 12,000,000. The same date, Heart Company paid 4,000,000 and agreed to pay the balance in four equal annual payments of 2,000,000 beginning January 1, 2015. Heart Company can borrow at 10% for a loan of this type. What is the acquisition cost of the franchise? 8,720,000 10,340,000 9,820,000 5,360,000
On January 1, 2014, Heart Company signed an agreement to operate as a franchisee of Ace Company for an initial franchise fee of 12,000,000. The same date, Heart Company paid 4,000,000 and agreed to pay the balance in four equal annual payments of 2,000,000 beginning January 1, 2015. Heart Company can borrow at 10% for a loan of this type. What is the acquisition cost of the franchise? 8,720,000 10,340,000 9,820,000 5,360,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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