On January 1, 2014, Svitlana Yaeger and Val Havlac formed a partnership. The partners agreed to invest equal amounts of capital. Havlac invested her proprietorship's assets and liabilities (all accounts have normal balances) as follows:

________________________________Havlac's Book Value                        Current Market Value

Accounts receivable ................................................ $20,200............................$20,000

Inventory ................................................................... 44,000.............................48,000

Prepaid expenses ......................................................... 4,800..............................4,000

Office equipment ...................................................... 92,000.............................56,000

Accounts payable ...................................................... 48,000.............................48,000

On January 1, 2014, Yaeger invested cash in an amount equal to the current market value of Havlac's partnership capital. The partners decided that Havlac would earn two-thirds of partnership profits because she would manage the business. Yaeger agreed to accept one third of profits. During the remainder of the year, the partnership earned $276,000. Havlac's withdrawals were $76,000, and Yaeger's withdrawals were $56,000.

Required

1. Journalize the partners' initial investments.

2. Prepare the partnership balance sheet immediately after its formation on January 1, 2014.

3. Calculate the partners' Capital balances at December 31, 2014.