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On March 1, 2017, Eckert and Kelley formed a partnership. Eckertcontributed $73,000 cash and Kelley contributed land valued at$58,400 and a building valued at $88,400. The partnership alsoassumed responsibility for Kelley’s $63,000 long-term note payableassociated with the land and building. The partners agreed to shareincome as follows: Eckert is to receive an annual salary allowanceof $30,000, both are to receive an annual interest allowance of 9%of their beginning-year capital investment, and any remainingincome or loss is to be shared equally. On October 20, 2017, Eckertwithdrew $29,000 cash and Kelley withdrew $22,000 cash. After theadjusting and closing entries are made to the revenue and expenseaccounts at December 31, 2017, the Income Summary account had acredit balance of $100,000.

Required:
1a. & 1b. Prepare journal entries to record the partners' initial investmentsand their subsequent cash withdrawals.
1c. Determine the partners' shares of income, and then prepare journalentries to close Income Summary and the partners' Withdrawalsaccounts.
2. Determine the balances of the partners’ capital accounts as ofDecember 31, 2017.

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Patrina Schowalter
Patrina SchowalterLv2
28 Sep 2019

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