The Fournil d'Opale bakery network buys an exclusive regional franchise contract for 420,000. The contract is signed in March 20X3, but the rights can only be exercised from 1 July 20X3, when the first outlet opens, that is 6 months before the year-end of 31 December 20X3. The useful life is 5 years, the straight-line method is used and the residual value is nil. Which amortisation entry should be recorded for 20X3?
- Cost of the franchise
- 420,000
- Useful life of the franchise
- 5
- Months of availability in 20X3
- 6