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  3. it's filling out the balance sheet or income state

It's filling out the balance sheet or income statement but I'm not sure which one...

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Accounting

It's filling out the balance sheet or income statement but I'm not sure which one I should write the numbers on.

1. Starbucks licenses some technology to McDonalds. McDonalds pays $120 million to use the technology for 5 years. Record the initial payment by McDonalds to Starbucks.

2. 1 months has passed since the McDonalds licensing term, how would you record an adjustment for this (there were no adjustments made since the initial cash receipt

=Balance Sheet=

-Assets

-----Cash

------Investments

-----Accounts Receivable, Gross

----- Allowance for bad debt

----- Inventory

----- Prepaid Expenses

----- PP&E

----- Accumulated Deprecation

----- Goodwill

----- Intangible Assets

-Liabilities + Equity

----- Accounts Payable

----- Deferred Revenues

----- Warranty Liabilities

----- Bonds Payable

----- Discount on Bonds

----- Common Stock (Contributed Capital)

----- Additional Paid In capital

----- Retained Earnings (Earned Capital)

=Income Statement=

-----Revenues

-----Cost of Good Sold

-----Description

-----Expenses/ other

-----Net Income

Where and what numbers should I put on in this case?

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