Data for the Baylee Company partnership are presented in E12.16. 

Instructions 

Prepare the entries to record: 

a. The sale of the equipment. 

b. The allocation to the partners of the gain or loss on liquidation. 

c. The payment to creditors.

d. The distribution of cash to the partners.

Data from Exercise 12.16

At December 31, Baylee Company has cash of $40,000, equipment of $130,000, accumulated depreciation of $40,000, accounts payable of $55,000, and the following partners’ capital balances: H. Bayer $45,000 and J. Leech $30,000. The partnership is liquidated on December 31 of the current year and $100,000 cash is received for the equipment. Bayer and Leech share profits and losses equally.