Partner investments; journal entries.
The LP partnership was formed on January 1, 19X7, by investments from Bill Levy and Marv Parcells. Levy contributed $30,000 cash and $80,000 of land. Parcells contributed various assets from a business that he had operated over the past five years. A balance sheet from that business disclosed the following:
|
Accounts receivable |
27,000 |
|
Allowance for uncollectibles |
(3,200) |
|
Equipment |
68,000 |
|
Accumulated depreciation |
(24,000) |
The partners confirmed that the allowance for uncollectible accounts should be decreased by $600. In addition, an independent appraisal determined that fair market values of the land and equipment on January 1 were $125,000 and $35,000, respectively.
Prepare the journal entries needed to record the investments of Levy and Parcells.