H & M begin a partnership on January 1, 2017, each partner contributes the following Partner H Contributes: Partner M Contributes: BV 0,000 40,000 15,000 12,000 EMV BX 40,000 48,000 (10,000) (10,000) Cash Inventory Building Note The partners agree to begin operations with equal capital balances. The articles of partnership also provide that at each year end profits and losses are allocated as follows 1) For managing the business, H is credited with a bonus of 10 percent of partnership income after subtracting the bonus. No bonus is accrued if the partnership records a loss. 2) Both partners are entitled to interest equal to 10 percent of the average monthly capital balance for the year without regard for the income or drawings of that year 3) Any remaining profit or loss is divided 60 percentto H and 40 percentto M 4) Each partner is allowed to withdraw $800 per month in cash from the business. On October 1, 2017, H invested an additional $12,000 cash in the business. For 2017, the partnership reported income of $33,000. L, an employee, is allowed to join the partnership on January 1,2018. The new partner invests $66,000 directly into the business for a one-third interest in the partnership property. The revised partnership agreement still allows for both the bonus to H and the 10 percent interest, but all remaining profits and losses are now split 40 percent each to H and L with the remaining 20 percent to M. L is also entitled to $800 per month in drawings M chooses to withdraw from the partnership a few years later. After negotiations, all parties agree that M should be paid a $90,000 settlement. The capital balances on that date were as follows: H, capital 88,000 M, capital $ 78,000 L, capital $72,000 Required: 1) Assuming that this partnership uses the bonus method exclusively, make all necessary journal entries. 2) Assuming that this partnership uses the goodwill method exclusively, make all necessary journal entries