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Prepare journal entry to close the income summary account

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Question - On Jan11,2011 Olivia and David organize as a partnership called the Landing Zone. Olivia's initial net investment is $ 30,000 and David's initial investment is $10,000. The partnership's net income for the year ended December 31, 2011 is $80,000. Allocate income and prepare the journal entry to close the income summary account. Provided-

a. Annual salary allowances of $40,000 to Olivia and $ 25,000 to David

b. Interest Allowances equal to 5% of each partner's beginning -of- the year capital balance

Any remaining balance of income or loss to be shared 3:1

Reference no: EM132623330

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