Kurt and Wyatt are forming a partnership to develop a theme park near Carlson City, Florida. Kurt contributes cash of $3,000,000 and land with a current market value of $10,500,000. When Kurt purchased the land in 2015, its cost was $5,500,000. The partnership will assume Kurt's $3,500,000 note payable on the land. Wyatt contributes cash of $5,000,000 and equipment with a current market value of $5,500,000.

Requirements

1. Journalize the partnership's receipt of assets and liabilities from Kurt and from Wyatt.

2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing.

3. Explain your reasoning.