Exercise 15-1 John, Jeff, and Jane decided to engage in a real estate venture as a partnership. John invested $85,300 cash and Jeff provided office equipment that is carried on his books at $80,100. The partners agree that the equipment has a fair value of $116,800. There is a $28,700 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her a capital interest in the partnership. Assuming that each partner is to receive an equal capital interest in the partnership, (a) Record the partnership formation under the bonus method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Accounts Payable Accounts Receivable Accrued Expenses Accrued Liabilities Advances from Customers Allen, Capital Allowance for Depreciation of Buildings Allowance for Depreciation of Equipment Allowance for Doubtful Accounts Allowance for Future Inventory Losses Andrews, Capital Back, Capital Bad Debt Expense Bennet, Capital Beth, Capital Bill, Capital Brian, Capital Brown, Capital Buildings Cain, Capital Cash Coss, Capital Cox, Capital Dallas, Capital Dave, Capital Down, Capital Equipment Folkert, Capital Forth, Capital Gallo, Capital Goodwill Hamm, Capital Income Summary Insurance Expense Interest Expense Interest Payable Inventory Investments Jane, Capital Jeff, Capital John, Capital Julie, Capital Julie, Drawing Kazma, Capital Land Linda, Capital Mary, Capital Matt, Capital Meyers, Capital Mike, Capital Moore, Capital Mortgage Payable Nancy, Capital No Entry Notes Payable Operating Expenses Other Current Liabilities Paul, Capital Phoenix, Capital Prepaid Expenses Prepaid Insurance Snow, Capital Snow, Capital Steph, Capital Supplies Tom, Capital Tom, Drawing Tucker, Capital Tucson, Capital Unrealized Gain on Revaluation of Building Unrealized Gain on Revaluation of Inventory Unrealized Gain on Revaluation of Land Unrealized Loss on Revaluation of Building Unrealized Loss on Revaluation of Inventory Unrealized Loss on Revaluation of Land Exercise 15-1 John, Jeff, and Jane decided to engage in a real estate venture as a partnership. John invested $85,300 cash and Jeff provided office equipment that is carried on his books at $80,100. The partners agree that the equipment has a fair value of $116,800. There is a $28,700 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her a capital interest in the partnership. Assuming that each partner is to receive an equal capital interest in the partnership, (a) Record the partnership formation under the bonus method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit Accounts Payable Accounts Receivable Accrued Expenses Accrued Liabilities Advances from Customers Allen, Capital Allowance for Depreciation of Buildings Allowance for Depreciation of Equipment Allowance for Doubtful Accounts Allowance for Future Inventory Losses Andrews, Capital Back, Capital Bad Debt Expense Bennet, Capital Beth, Capital Bill, Capital Brian, Capital Brown, Capital Buildings Cain, Capital Cash Coss, Capital Cox, Capital Dallas, Capital Dave, Capital Down, Capital Equipment Folkert, Capital Forth, Capital Gallo, Capital Goodwill Hamm, Capital Income Summary Insurance Expense Interest Expense Interest Payable Inventory Investments Jane, Capital Jeff, Capital John, Capital Julie, Capital Julie, Drawing Kazma, Capital Land Linda, Capital Mary, Capital Matt, Capital Meyers, Capital Mike, Capital Moore, Capital Mortgage Payable Nancy, Capital No Entry Notes Payable Operating Expenses Other Current Liabilities Paul, Capital Phoenix, Capital Prepaid Expenses Prepaid Insurance Snow, Capital Snow, Capital Steph, Capital Supplies Tom, Capital Tom, Drawing Tucker, Capital Tucson, Capital Unrealized Gain on Revaluation of Building Unrealized Gain on Revaluation of Inventory Unrealized Gain on Revaluation of Land Unrealized Loss on Revaluation of Building Unrealized Loss on Revaluation of Inventory Unrealized Loss on Revaluation of Land