Journalize the activity and determine the effect the activity have on the partner's capital accounts and their outside basis.

Year $1$ on January $1,$ A contributes $$100,000$ to the partnership, a consulting firm. B contributes investment property with a FMV of $$100,000$ and a basis of $$60,000.$

On June $30,$ each partner takes a $$60,000$ draw. As of December $31,$ the partnership generates net income of $$400,000.$ Partnership liabilities totaled $$50,000.$ They each took a draw of $$60,000.$

Year $2$ On January $1,$ a new partner, C$,$ was brought in$.$ The FMV of the investment property at the time was $$120,000.$ Determine C$\text{'}$s contribution as an equal partner.

On June $30,$ the partners each took a $$70,000$ draw and purchased a second investment property for $$200,000.$

As of December $31,$ the partnership generates net income of $$900,000.$ Partnership liabilities totaled $$80,000.$ They each took an additional draw of $$70,000.$

Year $3$ On January $1,$ a new partner, D was brought in$.$ He contributed cash. At the time, the FMV of property $1$ was $$145,000$ and the FMV of property $2$ was $$215,000.$ Determine D$\text{'}$s contribution as an equal partner.

On June $30,$ the partners each took an $$80,000$ draw. The partnership purchased investment property $3$ for $$250,000.$

As of December $31,$ the partnership generates net income of $$1,000,000.$ Partnership liabilities totaled $$120,000.$ They each took a draw of $$80,000.$

Year $4$ On January $1,$ they sold investment property for $$185,000$