On January 3, 2014, Continental Services, Inc, signed an agreement authorizing Peen Company to operate as a franchisee over a 20-year period for an initial franchise fee of $200,000 received when the agreement was signed. Peen commenced operations on July 1 . 2014, at which date all of the initial services required of Continental had been performed. The agreement also provides that Peen must pay
a continuing franchise fee equal to 6% of the revenue from the franchise annually to Continental. Peen's franchise revenue for 2014 was $900,000 . For the year ended December 31 . 2014, how much should Continental record as revenue from franchise fees from the Peen franchise?
a. $100,000
b. $106,000
c. $254,000
d. $266,000
C
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