xercise $7-35$ izing Franchise L$06$

Pizza Extravaganza grants franchisees the right to operate a pizzeria using the company's name, menu items, d$$cor$,$ and general operational program. A franchisee pays a $$250,000$ initial fee for management training and extensive planning documents. After the franchise opens, the franchisee can choose to sign an annual agreement and pay a fee of $$75,000$ per year for additional training, accounting services, and real$-$time consulting services. A new franchise agreement is signed on June $1$ and the new pizzeria opened up for business on December $31.$ A franchisee signed up for one year of consulting services on December $31.$

When is revenue recognized for the $($a$)$ $$250,000$ initial fee, and $($b$)$ $$75,000$ consulting fee?xercise $7-35$ izing Franchise L$06$

Pizza Extravaganza grants franchisees the right to operate a pizzeria using the company's name, menu items, d$$cor$,$ and general operational program. A franchisee pays a $$250,000$ initial fee for management training and extensive planning documents. After the franchise opens, the franchisee can choose to sign an annual agreement and pay a fee of $$75,000$ per year for additional training, accounting services, and real$-$time consulting services. A new franchise agreement is signed on June $1$ and the new pizzeria opened up for business on December $31.$ A franchisee signed up for one year of consulting services on December $31.$

When is revenue recognized for the $($a$)$ $$250,000$ initial fee, and $($b$)$ $$75,000$ consulting fee?