Essay
On March 1,2017 Daisy Miller signed a five-year franchise agreement for the exclusive rights to sell Delightful Shakes products in Montreal,Quebec.The agreement stipulates that Daisy will pay the franchisor $30,000 upon signing the agreement and an ongoing royalty of 6% of monthly sales payable on the 20th of each following month.Daisy started operating the new franchise immediately after signing the agreement.Her sales for the first two months were $20,000,and $30,000.Daisy amortizes the franchise agreement monthly on a straight-line basis.
Required:
Prepare journal entries related to franchise fees during the first two months of operation.
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