Joseph, John, and Judith each have a $60,000 capital balance. Joseph is retiring from the business. The partners agree to revalue the assets at current market value. A real estate appraiser values the land at $126,000 (book value is $90,000). The profit-and loss ratio is 1:2:3.
Requirements
1. Journalize the revaluation of the land on July 31.
2. Journalize the payment of $66,000 to Joseph upon his retirement the same day.