Kane and Abel decided to form a partnership, Heavenly Music School, as at $1$ July

$2017.$ The partnership agreement sets out the following terms:

$1.$ Kane to contribute $$960,000$ cash, office equipment valued at $$724,000$ and

notes payable of $$100,000.$

$2.$ Abel to contribute a land and building valued at $$2,080,000$ and mortgage of

$$480,000.$

$3.$ They were both to draw a salary of $$160,000$ per annum each.

$4.$ Interest of $5\%$ was to be paid on their initial capital investment and interest at

$10\%$ was to be charged on partners$$ drawings.

$5.$ Profit or loss of the business to be shared equally.

The profit for the year ended $30$ June $2018$ of $$960,000$ and the residual profit was

divided evenly between the partners.

Kane withdrew $$40,000$ on $1$ October $2017$ while Abel withdrew $$80,000$ on $1$ April

$2018.$

Required:

a$)$ Prepare the journal entries necessary to open the records of the partnership as

at $1$ July $2017(3\mathrm{.}5$ marks$).$

b$)$ Prepare a Profit Distribution $$T$$ or running balance account for Heavenly

Music School for the year ended $30$ June $2018(4\mathrm{.}5$ marks$).$