E. Arway, Batts, and Carlone are partners, having capital balances of $65,000, $55,000, and $40,000, respectively.
The partners share net income equally. Carlone has decided to leave the partnership.
Instructions: Prepare the entries to record each of the following.
(1) The partners agree that the inventory of the partnership should be increased by $12,750 to recognize its fair
market value. Arway buys Carlone's interest in the partnership for $53,000.
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