M and P form a partnership in which they will share capital in a 2:3 ratio.

M contributes $200,000 in cash.

P contributes cash of $100,000 and assets having the following fair market values: o Inventory, $150,000 o Equipment, $275,000

Prepare the entry to record the formation of the partnership, under each of the following methods. Be sure to present any required calculations.

a. The bonus approach

b. The goodwill approach