C - 4 entries

• Record entry to reclassify payment made to repair personal residence.
• Record entry to close drawings accounts for 2017.
• Record entry to close revenue and expense accounts for 2017.
• Record the distribution of net income to partners.

D - Record entry for the payment made by Thomas using the bonus method.

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assi stance from a local accountant. They had begun a new business in 2017 but had never used an accountant's services. Hugh and Jacobs began the partnership by contributing $90,000 and $40,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs wasto be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner wasto be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $7000 was to go to Hugh with a $17,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. In 2017, revenuestotaled $115,000, and expenses were $87,000 (not including the partners' compensation allowance) Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $7,500 for repairs made to Hugh's home and charged it to repair expense. On January 1, 2018, the partnership sold a 20 percent interest to Thomas for $44,000 cash. This money was contributed to the business with the bonus method used for accounting purposes. c. What journal entries should the partnership have recorded on December 31, 2017? d. What journal entry should the partnership have recorded on January 1, 2018? In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assi stance from a local accountant. They had begun a new business in 2017 but had never used an accountant's services. Hugh and Jacobs began the partnership by contributing $90,000 and $40,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs wasto be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner wasto be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $7000 was to go to Hugh with a $17,000 amount assigned to Jacobs. Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively. In 2017, revenuestotaled $115,000, and expenses were $87,000 (not including the partners' compensation allowance) Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $7,500 for repairs made to Hugh's home and charged it to repair expense. On January 1, 2018, the partnership sold a 20 percent interest to Thomas for $44,000 cash. This money was contributed to the business with the bonus method used for accounting purposes. c. What journal entries should the partnership have recorded on December 31, 2017? d. What journal entry should the partnership have recorded on January 1, 2018