E 16-12 Partner retirement entries—Fair value adjustment A balance sheet at December 31, 2016, for the Bec, Dee, and Lyn partnership is summarized as follows:

Assets $800,000 Liabilities $200,000 Loan to Dee 100,000 Bec capital (50%) 300,000

$900,000 Dee capital (40%) 300,000 Lyn capital (10%) 100,000

$900,000 Dee is retiring from the partnership. The partners agree that partnership assets, excluding Dee’s loan, should be adjusted to their fair value of $1,000,000 and that Dee should receive $310,000 for her capital balance net of the

$100,000 loan. The bonus approach is used; therefore, no goodwill is recorded.

REQuIRED: Determine the capital balances of Bec and Lyn immediately after Dee’s retirement.