Prepare the journal entries to record the initial investment

Reference no: EM133655584

Question: Francine and Shaun formed a partnership on 1 July 2017. Some of Francine's business assets and liabilities were assumed by the partnership, and these are listed below at both carrying amounts and fair value. Cash at bank Accounts receivable Inventory Equipment Loan $ Carrying amount 62 000 34 000 98 600 320 000 80 000 Fair value $ 62000 34 000 96 000 430 000 80 000 Shaun contributed a commercial property to the partnership that had a fair value of $1 200 000 which was financed by a mortgage of $680 000. They agreed to share profits and losses evenly. The partnership earned a profit of $254 800 for the financial year ended on 30 June, 2018. Retained Earnings accounts are not used. Ignore GST.

Required:

Question 1) Prepare the journal entries to record the initial investments of both partners.

Question 2) Prepare the closing general journal entry to distribute the profit to Francine and Shaun.

Reference no: EM133655584

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