Reference no: EM133000624

On April 1, 2020, Harry Regal and Meghan Merle formed a partnership in Alberta, renting reusable moving boxes.

Regal Merle Contribution$97,000

cash $137,000

land $50,000

building Profit sharing$107,000

salary allowance 15% of original

capital investments 15% of original

capital investments Cash withdrawal during year $77,000 $62,000

Net Income during the year was $177,000 and was in the Income Summary account. The partners agreed to share profit by allowing salary allowance, interest on their initial investments, and sharing the balance equally.

Required:

Problem 1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income Summary and withdrawals accounts.