On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow:

The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally.
Instructions
1. Journalize the entries to record the investments of Keene and Wallace in the partnership accounts.
2. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace.
3. After adjustments at February 28, 20Y9, the end of the first full year of operations, the revenues were $300,000 and expenses were $230,000, for a net income of $70,000. The drawing accounts have debit balances of $19,000 (Keene) and $24,000 (Wallace).
Journalize the entries to close the revenues and expenses and the drawing accounts at February 28, 20Y9.

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Wallace's Ledger Agreed-Upon Accounts Receivable Allowance for Doubtful Accounts Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) Balance 19,900 1,200 83,500 29,800 15,000 37,500 Valuation $19,500 1,400 55,400 15,000 37,500