On March 1, Eckert and Kelley formed a partnership. Eckert contributed $94,000 cash, and Kelley contributed land valued at $75,200 and a building valued at $105,200. The partnership also took Kelleys $84,000 long-term note payable associated with the land and building. The partners agreed to share income as follows: Eckert gets an annual salary allowance of $31,000, both get an annual interest allowance of 12% of their initial capital investment, and any remaining income or loss is shared equally. On October 20, Eckert withdrew $31,000 cash and Kelley withdrew $24,000 cash. First year income was $86,000. Required: 1a. & 1b. Prepare journal entries to record the partners' initial capital investments and their subsequent cash withdrawals. 1c. Determine the partners' shares of income, and then prepare journal entries to close Income Summary and the partners' withdrawals accounts. 2. Determine the balances of the partners capital accounts as of December 31.

No	Date	General Journal	Debit	Credit
1	March 01	Cash	94,000
		Land	75,200
		Building	105,200
		Long-term note payable		84,000
		Eckert, Capital		94,000
		Kelley, Capital		96,400
2	October 20	Eckert, Withdrawals	31,000
		Kelley, Withdrawals	24,000
		Cash		55,000

Req 1A and 1B

Determine the partners shares of income, and then prepare journal entries to close Income Summary and the partners' withdrawals accounts. (Enter all allowances as positive values. Enter losses as negative values.)

	Allocation of Partnership Income
		Eckert	Kelley	Total
	Net Income
	Salary allowances		$0	0
	Balance of income
	Interest allowances			0
	Balance of income
	Balance allocated equally			0
	Balance of income			$0
	Shares of the partners	$0	$0
Date	General Journal	Debit	Credit
Record the entry to close the partners' withdrawals accounts.
Dec 31	Eckert, Capital
	Kelley, Capital
	Eckert, Withdrawals
	Kelley, Withdrawals
Record the entry to close the income summary account.
Dec 31	Income summary
	Eckert, Capital
	Kelley, Capital

Req 1A and 1B

Req 1C

Req 2

Determine the balances of the partners' capital accounts as of December 31.

Capital Account Balances	Eckert	Kelley
Initial investment
Withdrawals
Share of income
Ending balances	$0	$0