The post-closing trial balances of two proprietorships on January 1, 2012, are presented below.

                                 

High and Lowe decide to form a partnership, High Lowe Company, with the following agreed upon valuations for noncash assets.

                               

All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that High will invest $3,000 in cash, and Lowe will invest $18,000 in cash.

Instructions
  (a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership.
  (b) Journalize the additional cash investment by each partner.
  (c) Prepare a balance sheet for the partnership on January 1, 2012.