On december 31, year 1, rice, inc., authorized graf to operate as a franchisee for an initial franchise fee of $150,000. of this amount, $60,000 was received upon signing the agreement and the balance, represented by a note, is due in three annual payments of $30,000 each beginning december 31, year 2. the present value on december 31, year 1, of the three annual payments appropriately discounted is $72,000. according to the agreement, the nonrefundable down payment represents a fair measure of the services already performed by rice; however, substantial future services are required of rice. collectibility of the note is reasonably certain. in rice's december 31, year 1, balance sheet, unearned franchise fees from graf's franchise should be reported as