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Assume that two individuals agree to form a partnership. Partner A is contributing an operating...

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Accounting

Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports the following balance sheet:

Cash

.$120,000

Accounts payable.

$160,000

Receivables

160,000

Accrued liabilities

120,000

Inventories

200,000

Total liabilities

$280,000

Total assets

$480,000

Net assets

$200,000

Partner B is contributing cash of $280,000. The partners agree that the initial capital of the partnership should be shared equally.

Required: Prepare the journal entry to record the capital contributions of the partners assuming that the partners wish to employ the Bonus Method.

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