Becker Co. has a franchise restaurant business. On January 15 of the current year, Becker charged an investor a fran?chise fee of $65,000 for the right to operate as a franchisee of one of Becker’s restaurants. A cash payment of $25,000 towards the fee was required to be paid to Becker during the current year.  Four subsequent annual payments of $10,000 with a present value of $34,000 at the current market interest rate represent the balance of the fee which is expected to be collected in full.  The initial cash payment is nonrefundable and no future services are required by Becker. What amount should Becker report as franchise revenue during the current year?
　　A. $65,000
　　B. $0
　　C. $59,000
　　D. $25,000
　　Answer:C
　　C is corrent. Revenue on a franchise agreement should be recognized when the franchisor has substantially performed all material services and conditions, and collectibility is reasonably assured. Baker should recognize $59,000 in revenue: the initial cash payment ($25,000) plus the present value of the future cash payments ($34,000).
　　A is incorrect. The present value of the future payments should be recognized, not the total payments.
　　B is incorrect. All revenue should be recognized.
　　D is incorrect. Baker may also recognize the present value of the future payments.