During the first year, the Martin and Steven partnership in SE2 earned an income of $10,000. Assume the partners agreed to share income and losses in the ratio of the beginning balances of their capital accounts. How much income should be transferred to each Capital account?
In SE2, Martin contributes cash of $24,000, and Steven contributes office equipment that cost $20,000 but is valued at $16,000 to the formation of a new partnership. Prepare the journal entry to form the partnership.