Your client "Just Right" has been advised that they should convert to a company. Explain the process of a conversion from a partnership to a company. Research and consider the accounting standards AASB 116 and AASB 3. Your response should include at least 4 key elements.

Spoon Pty Ltd was incorporated on 1 July 2021 to acquire a business partnership, trading as "Just Right", as a going concern. The consideration for the purchase of the business was 45,000 shares issued at $1 each and $15,000 cash.

The assets of Just Right were:

$

Freehold premises 40,000

Plant & equipment 30,000

Accumulated depreciation 5,000

Inventory 12,500

Accounts receivable 7,500

Allowance for doubtful debts 500

Accounts payable 18,000

Bank overdraft 2,000

Spoton Ltd assessed the fair value of assets to be:

$

Freehold premises 50,000

Plant & equipment 20,000

Inventory 12,500

Accounts receivable 6,000

All liabilities of Just Right were accepted at book value by Spoton Ltd

Required:

b) Prepare the general journal entries in the books of Spoton Ltd to fully record the acquisition of, and payment for, the assets and liabilities of Just Right.