On June 30 Joshua Axtell and Zack Riesel formed a partnership. The partners agreed to invest equal amounts of capital. Axtell invested his proprietorship's assets and liabilities (credit balances in parentheses).

On June 30 Riesel invested cash in an amount equal to the current market value of Axtell's partnership capital. The partners decided that Axtell would earn two-thirds of partnership profits because he would manage the business. Riesel agreed to accept one-third of the profits. During the remainder of the year, the partnership earned \(\$ 60,000\). Axtell's drawings were \(\$ 35,200\), and Riesel's drawings were \(\$ 23,000\).

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1. Journalize the partners' initial investments.
2. Prepare the partnership balance sheet immediately after its formation on June 30 .
3. Journalize the December 31 entries to close the Income Summary account and the partner drawing accounts.

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Accounts receivable.. Allowance for doubtful accounts Inventory Prepaid expenses. Office equipment Accumulated depreciation Accounts payable.............. Axtell's Book Value $ 7,200 Current Market Value $ 7,200 (-0--) 22,340 (1,050) 24,100 1,700 1,700 45,900 27,600 (15,300) -0- (19,100) (19,100)