Joanie's Java Sells Franchises of Its Coffee Shop Concept

Multiple Choice

Joanie's Java sells franchises of its coffee shop concept.Franchisees pay a $375,000 initial franchise fee at the time of signing the contract.In return Joanie's Java provides assistance until the coffee shop is opened, usually a period of six months.After opening the franchisee pays a royalty of 2% of sales.What are the appropriate revenue recognition polices for Joanie's Java as a franchisor?

A) The $375,000 fee at the time of signing and the 2% royalty when received.
B) The $375,000 fee when the coffee shop opens and the 2% royalty when received.
C) The $375,000 fee at the time of signing and the 2% royalty on an accrual basis.
D) The $375,000 fee when the coffee shop opens and the 2% royalty on an accrual basis.