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Question $3$: In $2024,$ the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $$10,000,000.$ The road was completed in $2026.$ Information related to the contract is as follows:Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor

receives $$690,000$ in exchange for satisfying the following separate performance obligations: $(1)$ franchisees have a five$-$year right to

operate as a Monitor Muffler retail establishment in an exclusive sales territory, $(2)$ franchisees receive initial training and certification

as a Monitor Mechanic, and $(3)$ franchisees receive a Monitor Muffler building and necessary equipment. The stand$-$alone selling price

of the initial training and certification is $$16,800,$ and $$522,000$ for the building and equipment. Monitor estimates the stand$-$alone

selling price of the five$-$year right to operate as a Monitor Muffler establishment using the residual approach.

Monitor received $$84,000$ on July $1,2024,$ from Perkins and accepted a note receivable for the rest of the franchise price. Monitor will

construct and equip Perkins's building and train and certify Perkins by September $1,$ and Perkins's five$-$year right to operate as a

Monitor Muffler establishment will commence on September $1$ as well.

Required:

What amount would Monitor calculate as the stand$-$alone selling price of the five$-$year right to operate as a Monitor Muffler retail

establishment?

What journal entry would Monitor record on July $1,2024,$ to reflect the sale of a franchise to Dan Perkins?

How much revenue would Monitor recognize in the year ended December $31,2024,$ with respect to its franchise arrangement

with Perkins? $($Ignore any interest on the note receivable.$)$

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