On July $1,2025,$ Ed Charles signed an agreement to operate as a franchisee of Sunland, Inc., for an initial franchise fee of $$876000.$ Of this amount, $$292000$ was paid when the agreement was signed and the balance is payable in four equal annual payments of $$146000$ beginning July $1,2026.$ The agreement provides that the down payment is not refundable and no future services are required of the franchisor. Charles's credit rating indicates that he can borrow money at $15\%$ for a loan of this type. Information on present and future value factors are as follows:

Present value of $1$ at $15\%$ for $4$ periods

$0\mathrm{.}57$

Future value of $1$ at $15\%$ for $4$ periods

$1\mathrm{.}75$

Present value of an ordinary annuity of $1$ at $15\%$ for $4$ periods

$2\mathrm{.}85$

Charles should record the acquisition cost of the franchise on July $1,2025$ at

$$671600.$

$$708100.$

$$1022000.$

$$876000.$