A. Larsen and B. Samec have decided their partnership earnings will be shared as follows: (a) 13%

Question:

A. Larsen and B. Samec have decided their partnership earnings will be shared as follows:

(a) 13% interest allowance on capital balances at the beginning of the year,

(b) Remainder to be shared equally.

Capital balances of Larsen and Samec at the beginning of the year are $77,000 and $26,000, respectively. Net income is $14,000 for the year. Record the journal entry to update the capital balances of Larsen and Samec on December 31.

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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