Kim Locke and Mary Leigh Coker have capital accounts of $420,000 and $480,000, respectively. Jeff Doggett and Danny Cambrey are to join the partnership. Doggett invests

$425,000 in the partnership for which he receives a capital credit of $425,000. Cambrey purchases a one-half interest from Locke for $300,000 and a one-fourth interest from Coker for $90,000.

Required:

1. Prepare the journal entries to record the admission of Doggett and Cambrey to the partnership.

b. Determine the capital balances of the partners after the admission of Doggett and Cambrey.