Question 1 (1 point) Rizzo Corp sells baseballs and sporting equipment along with the installation of sporting equipment (such as basketball hoops, batting cages, etc.) When the company records revenue, a transaction price for multiple performance obligations should be allocated: a) based on selling price from the company's competitors. b) based on forecasted cost of satisfying performance obligation. c) based on what the company could sell the goods for on a standalone basis. d) based on total transaction price less residual value. Question 2 (1 point) Arrieta Company purchased $2,250,000 of 8% bonds of Baez Company on January 1, 2023, paying $1,969,601. The bonds mature January 1, 2033; interest is payable each July 1 and January 1. The effective yield on the bonds is 10%. Arietta Company uses the effective-interest method and plans to hold these bonds to maturity. What journal entry is made by Arrieta Company on January 1, 2023? a) 2,250,000 Debt Investment Discount on Debt Investment Cash 280,399 1,969,601 b) 2,250,000 Debt Investment Premium on Debt Investment Cash 280,399 1,969,601 2,250,000 Debt Investment Cash 2,250,000 1,969,601 d) Debt Investment Cash 1,969,601 Question 3 (1 point) McVoy Inc. sells franchises to independent operators throughout the northwestern part of the United States. The contract with the franchisee includes the following provisions. 1. The franchisee is charged an initial fee of $235,000. Of this amount, $35,000 is payable when the agreement is signed, and a $200,000 zero-interest-bearing note is payable with a $35,000 payment at the end of each of the 5 subsequent years. The present value of an ordinary annuity of five annual receipts of $35,000, each discounted at 4%, is $155,814. 2. All of the initial franchise fee collected by Blue is to be refunded and the remaining obligation canceled if, for any reason, the franchisee fails to open his or her franchise. Franchise agreement is signed on January 2, 2024. No future services are required by the franchisor once the franchise starts operations. The Franchise begins operations on June 1, 2024. What journal entry should McVoy make on January 2, 20242 a) Cash Notes Receivable Unearned Franchise Fee Revenue 35,000 200,000 235,000 b) 35,000 200,000 Cash Notes Receivable Discount on Notes Receivable Unearned Franchise Fee Revenue 44,186 190,814 190,814 Unearned Franchise Fee Revenue Franchise Fee Revenue 190,814 d) 35,000 200,000 Cash Notes Receivable Discount on Notes Receivable Franchise Fee Revenue 44,186 190,814