E12-48 E. Hartley and S. Kave have capital balances on January 1 of $40,000 and $70,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $24,000 for E. Hartley and $15,000 for S. Kave, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by E. Hartley and 40% by S. Kave. Instructions (a) Prepare a schedule showing the distribution of net income, assuming net income is (1) $60,000 and (2) $42,000. (b) Journalize the allocation of net income in each of the situations above