Marcella Ford and Jimmy Smith formed a partnership to operate a window-cleaning company:

December 31, 2016

During 2015, the partnership earned income of just $168,000. The partnership agreement specifies that income and losses are to be divided by paying salaries of $80,000 to Ford and $120,000 to Smith, allowing 8 percent interest on beginning capital investments, and dividing any remainder equally.

1. Prepare the necessary journal entries to record the distribution of income for the period in the partners capital account.
2. Show the computation schedule of the partnership earned income of $168,000.