In the early part of $2024,$ the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new

business in $2023$ but had never used an accountant's services.

Hugh and Jacobs began the partnership by contributing $$115,000$ and $$65,000$ in cash, respectively. Hugh was to work occasionally at

the business, and Jacobs was to be employed full$-$time. They decided that year$-$end profits and losses should be assigned as follows:

Each partner was to be allocated $10$ percent interest computed on the beginning capital balances for the period.

A compensation allowance of $$5,000$ was to go to Hugh with a $$21,000$ amount assigned to Jacobs.

Any remaining income would be split on a $4$:$6$ basis to Hugh and Jacobs, respectively.

In $2023,$ revenues totaled $$140,000,$ and expenses were $$125,000($not including the partners' compensation allowance$).$ Hugh

withdrew cash of $$7,000$ during the year, and Jacobs took out $$12,000.$ In addition, the business paid $$7,000$ for repairs made to

Hugh's home and charged it to repair expense.

On January $1,2024,$ the partnership sold a $15$ percent interest to Thomas for $$69,000$ cash. This money was contributed to the

business with the bonus method used for accounting purposes.

Required:

c$.$ What journal entries should the partnership have recorded on December $31,2023?$

d$.$ What journal entry should the partnership have recorded on January $1,2024?$

Complete this question by entering your answers in the tabs below.

What journal entries should the partnership have recorded on December $31,2023?$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

$1$ Record entry to reclassify payment made to repair

personal residence.

Record entry to close drawings accounts for $2023.$

$3$ Record entry to close revenue and expense accounts

for $2023.$

$4$ Record the distribution of net income to partners.

What journal entry should the partnership have recorded on January $1,2024?$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

Journal entry worksheet

$1$

Record the payment made by Thomas using the bonus method.

Note: Enter debits before credits.