On January 1, 2011, Boulder Investments Inc. acquired a franchise to operate a Burger Doodle restaurant. Boulder paid $275,000 for a 10-year franchise and incurred organization costs of $8,000.
1. Prepare the journal entry to record the cash payment for the franchise fee and the organization costs.
2. Prepare the journal entry to record the annual amortization expense at the end of the first year.