Exercise 12-1 Comparative entries for partnership and corporation

Suraj uppal and Parvinder Atwal began new business on February 14, When each invested $154,500 in the company. On December 20, it was decided that $60,800 of the company's cash would be distributed equally between the owners. Two cheques for $30,400 were prepared and given to the owners on December 23. On December 31, the company reported a $121,600 profit.

Prepare two sets of journal entries to record the investments by the owners, the distribution of cash to the owners, the closing of the income summary account, and the withdrawals or dividends under these alternative assumptions:

a. The business is a partnership

b. The business is a corporation that issued 1,000 common shares.