Anthony Commonplace and Billie Campus have agreed to form a cash-basis general partnership, Live-It-Up Partners, to own and operate apartment complexes in Universityville, USA. As of January 1, 20X4, the partnership takes legal title to the contributed property and commences operations. At the time of formation, Anthony contributed $280,000 cash and an apartment complex, Late Night Apts, valued at $2 million. Anthony purchased the complex on April 12, 20X1 for $1.6 million dollars and has been operating the property as a sole proprietorship. The property is subject to a recourse debt of $700,000 that is assumed by the partnership. Billie contributed $780,000 cash and an apartment complex, Campus Center Apartments, valued at $2.9 million and investment land valued at $300,000. Billie purchased the complex on November 7, 20X2 for $2.5 million and has been operating the property as a sole proprietorship. The complex is subject to a nonrecourse debt of $2.4 million. The land was purchased on August 28, 20X2 for $280,000.

In November and December 20X3, Anthony and Billie paid $25,000 for expenses that qualify as organizational costs. During this time, they also paid $15,000 for costs that meet the denition of start -up expenses. The $40,000 expense was paid for evenly by the two partners.

Immediately after formation, Anthony and Billie agreed to admit Curtis Laborer to the partnership. In return for agreeing to manage the daily operations of the partnership, Curtis received a 10% interest in capital and prots. His interest in the partnership vests immediately.

The partnership agreement complies with the 704(b) capital account maintenance requirements and contains a decit capital account restoration provision. In addition, the partnership agreement states that Anthony and Billie are to each receive cash draws of $7,000 per month beginning on January 31, 20X4. Any amounts by which the draws exceed his or her allocation of income for the year must be repaid to the partnership. Furthermore, Curtis is to receive a guaranteed payment, in his capacity as a partner, of $50,000 payable regardless of the protability of the partnership. All payments required by the partnership agreement were made in 20X4.

1. The book journal entry showing just the transfer of the capital amount from Anthony and Billie to Curtis.

2. A schedule showing how the recourse loan is to be allocated to the partners.

3. A schedule showing how the nonrecourse loan is allocated to the partners.