A summary balance sheet for Abdullah, Mohammed, and Meshal partnership on January 1, 2018 is shown below. Partners Abdullah, Mohammed, and Meshal allocate profit/loss in their respective ratios of 2:1:1. The partnership agreed to pay partner Mohammed $135,000 for his partnership interest upon his retirement from the partnership on January 1, 2018.

Assets

Cash $75,000

Marketable securities 60,000

Inventory 85,000

Land 90,000

Building-net 110,000

Total assets $420,000

Equities

Abdullah, capital $210,000

Mohammed, capital 105,000

Meshal, capital 105,000

Total equities $420,000

Required:

Prepare the journal entry to reflect Mohammed's retirement from the partnership:

1. Assuming a bonus to Mohammed.

2. Assuming a revaluation of total partnership capital based on the excess payment.

3. Assuming goodwill equal to the excess payment is recorded.