Clara and Eba agree to form a partnership with Eba contributing the following coming from her sole$-$proprietorship$-$owned music store:

Merchandise Inventory $-$ cost of P$120,000$; current fail value of P$100,000$

Equipment $-$ cost of P$500,000$; book value of P$450,000,$ current fair value of P$400,000,6\%$ one year note issued for the equipment on May $1$ for P$150,000$ to be assumed by the firm.

Clara agrees to contribute furnitures and fixtures which was purchased teo years ago for P$500,000$ less accumulated depreciation of P$200,000.$ Current market value is $80\%$ of book value. The partners further agree that the contribution of Eba be $50\%$ of total equity and Clara should invest additional cash to make her equity $50\%$

Direction: Accrue interest on the note before making two investment entries on Dec. $1$