1. (10 Points) Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports the following balance sheet:

Cash $ 60,000 Accounts payable. $ 80,000

Receivables 80,000 Accrued liabilities 60,000

Inventories 100,000 Total liabilities $140,000

Total assets $240,000 Net assets $100,000

Partner B is contributing cash of $140,000. The partners agree that the initial capital of the partnership should be shared equally.

Prepare the journal entry to record the capital contributions of the partners assuming that the partners wish to employ the Bonus Method.

Prepare the journal entry to record the capital contributions of the partners assuming that the partners wish to employ the Goodwill Method.